Sphagnum peat bogs store a large fraction of biologically-bound carbon, due to a steady accumulation of plant material over millennia. The resistance of Sphagnum biomass to decay is poorly understood but of high importance for preservation efforts and climate models. It is shown that peat cellulose and other glucose-rich polysaccharides are readily degradable by a commercial enzyme cocktail designed for the industrial saccharification of lignocellulose of vascular plants. However, prior hydrothermal pretreatment of peat was required for the enzymes to gain access to the polysaccharides. The pretreatment itself released monosaccharides and glucose-containing soluble oligosaccharides. The monosaccharide profile released from hydrothermal pretreatment was consistent with the expected hemicellulose content of Sphagnum and was clearly different from that seen for pretreated tissue from vascular plants, such as pretreated wheat straw. Cellulose retained in the insoluble part of peat was cleaved at a similar or higher rate compared to cellulose from vascular plant tissues. Confocal laser scanning microscopy showed that the hydrothermal pretreatment disrupted the cells and relocated lignin-like compounds. Peat contains a high concentration of iron, which likely explains the pronounced acidification observed for the pretreated peat slurry at ambient conditions during saccharification assays. The acidification is due to abiotic oxidative reactions that also inactivate the enzymes. Adding catalase to the reactions alleviated enzyme inactivation and essentially stopped acidification during saccharification. This study confirms the importance of considering those abiotic oxidative reactions that take place in drained peat material.