The fluvial fluxes of dissolved organic carbon (DOC) from peatlands form an important part of that ecosystem's carbon cycle, contributing approximately 35% of the overall peatland carbon budget. The in‐stream processes acting on the DOC, such as photodegradation and biodegradation, can lead to DOC loss and thus contribute CO2 to the atmosphere. The aim of this study was to understand what controls the rates of DOC degradation. Water samples from a headwater, peat‐covered catchment, were collected over a 23 month period and analyzed for the DOC degradation rate and dissolved organic matter (DOM) composition in the context of hydroclimatic monitoring. Measures of DOM composition included 13C solid‐state nuclear magnetic resonance spectroscopy, bomb calorimetry, and elemental analysis. Regression analysis showed that there was a significant role for the composition of the DOM in controlling degradation with degradation rates significantly increasing with the proportion of aldehyde and carboxylic acid functional groups but decreasing with the proportion of N‐alkyl functional groups. The highest rates of DOC degradation occurred when aldehyde functionality was at its greatest and this occurred on the recession limb of storm hydrographs. Including this knowledge into models of fluvial carbon fate for an 818 km2 catchment gave an annual average DOC removal rate of 67% and 50% for total organic carbon, slightly lower than previously predicted. The compositional controls suggest that DOM is primarily being used as a ready energy source to the aquatic ecosystem rather than as a nutrient source.