Purpose Paludiculture (crop cultivation in wet peatlands) can prevent carbon and nutrient losses while enabling biomass production. As vegetation in rewetted peatlands is often nitrogen (N) limited, input of N-rich water may promote biomass production and nutrient removal. However, it is unclear how N loading and soil characteristics affect biomass yield, nutrient dynamics, and ecosystem service provisioning in paludiculture. Methods We studied the influence of N loading (0, 50, 150, and 450 kg N ha−1 yr−1) on biomass production and nutrient sequestration of Typha latifolia (broadleaf cattail) and Phragmites australis (common reed) in mesocosms containing rewetted agricultural peat soil (intensively managed, near-neutral (IN)). To assess the interaction with soil characteristics T. latifolia was also grown on an extensively managed, acid (EA) peat soil. Results N loading stimulated biomass production and nutrient uptake of both T. latifolia and P. australis, with T. latifolia showing the most pronounced response. Biomass yield of T. latifolia was higher on IN soil than on EA soil due to the higher pH, despite lower nutrient availability. N was largely taken up by the vegetation, whereas bare soils showed N accumulation in pore and surface water, and 80% loss through denitrification. Soil phosphorus was efficiently taken up by T. latifolia, especially at high N loads. Conclusion N loading in paludiculture with T. latifolia and P. australis boosts biomass production while kick-starting peatland ecosystem services including nutrient removal. Nutrient availability and pH appear to be decisive soil characteristics when it comes to crop selection.