Peatland rewetting has been proposed as a vital climate change mitigation tool to reduce greenhouse gas emissions and to generate suitable conditions for the return of carbon (C) sequestration. In this study, we present annual C balances for a 5-year period at a rewetted peatland in Ireland (rewetted at the start of the study) and compare the results with an adjacent drained area (represents business-as-usual). Hydrological modelling of the 230-hectare site was carried out to determine the likely ecotopes (vegetation communities) that will develop post-rewetting and was used to inform a radiative forcing modelling exercise to determine the climate impacts of rewetting this peatland under five high-priority scenarios (SSP1-1.9, SS1-2.6, SSP2-4.5, SSP3-7.0 and SSP5-8.5). The drained area (marginal ecotope) was a net C source throughout the study and emitted 157 ± 25.5 g C m −2 year −1 . In contrast, the rewetted area (sub-central ecotope) was a net C sink of 78.0 ± 37.6 g C m −2 year −1 , despite relatively large annual methane emissions post-rewetting (average 19.3 ± 5.2 g C m −2 year −1 ). Hydrological modelling predicted the development of three key ecotopes at the site, with the subcentral ecotope predicted to cover 24% of the site, the sub-marginal predicted to cover 59% and the marginal predicted to cover 16%. Using these areal estimates, our radiative forcing modelling projects that under the SSP1-1.9 scenario, the site will have a warming effect on the climate until 2085 but will then have a strong cooling impact. In contrast, our modelling exercise shows that the site will never have a cooling impact under the SSP5-8.5 scenario. Our results confirm the importance of rapid rewetting of drained peatland sites to (a) achieve strong C emissions reductions, (b) establish optimal conditions for C sequestration and (c) set the site on a climate cooling trajectory.