Drained peatlands emit large amounts of greenhouse gases and cause downstream nutrient pollution. Rewetting aids in restoring carbon storage and sustaining unique biodiversity. However, rewetting for nature restoration is socio-economically not always feasible. Cultivation of Sphagnum biomass after rewetting allows agricultural production. In the short term, Sphagnum paludiculture is productive without fertilization but it remains unclear whether it sustains its functionality in the longer-term. We studied nutrient dynamics, organic matter build-up, and carbon and nutrient accumulation at a 16-ha Sphagnum paludiculture area in NW-Germany. Site preparation included topsoil removal and inoculation with Sphagnum and it was rewetted five and ten years ago and managed with mowing, irrigation, and ditch cleaning. The unfertilized sites were irrigated with (compared to bog conditions) nutrient-rich surface water and exposed to atmospheric nitrogen deposition of 21 kg N/ha/yr. Our data reveal that ten years of Sphagnum growth resulted in a new 30 cm thick organic layer, sequestering 2,600 kg carbon, 56 kg nitrogen, 3.2 kg phosphorus, and 9.0 kg potassium per ha/yr. Porewater nutrient concentrations were low and remained stable over time in the top layer, while ammonium concentrations decreased from 400–700 to 0–50 µmol/L in the peat profile over 10 years. Hydro-climatic fluctuations most likely caused the variation in ammonium in the top layer. We conclude that Sphagnum paludiculture enables rapid carbon and nutrient accumulation without active fertilization provided the biomass is not harvested, and provides perspective for bog restoration on agricultural peatlands. Large-scale application of Sphagnum paludiculture may mitigate environmental issues of unsustainable peatland-use.