Peat deposits are comprised of high organic content substances primarily derived from dead plant vegetation. Peat itself is not inert but undergoes continuous biological decomposition that causes progressive destruction of the peat fabric, reductions in fibre and organic contents and biogas generation. Depending on the degree of decomposition, the organic solids can exist as fresh (intact) fibres, slightly decomposed or ultimately completely decomposed (amorphous) material. From a geotechnical perspective, an understanding of the relationship between degree of decomposition and engineering properties, including the level of compressibility, is important in dealing with such problematic deposits. However a review of the literature indicates that such relationships have not been sufficiently investigated. Moreover, potential impacts of uncontrolled or unexpected decomposition in-situ are regularly discounted in geotechnical practice. This paper reviews decomposition effects in peat and potentially significant knock-on effects in terms of the material's physical properties and compressibility. Progressive reduction in solids volume and deterioration in the integrity of the organic structure due to on-going decomposition may cause significant additional settlement to occur over time. More decomposed peat generally undergoes lower primary consolidation and creep strains and is also less prone to future decomposition, compared with lesser decomposed peat.