Climate variability can induce rapid changes in peatland ecosystems, affecting both carbon cycling and vegetation succession. Diatoms are an important group of ubiquitous and diverse algae in peatlands. Until now, the responses of diatom communities to climate variability have rarely been explored in peatlands, especially in subtropical regions. In this study, monitoring and paleolimnological datasets were combined to decipher environmental changes of a subtropical montane peatland (central China) over the last two centuries. Seasonal monitoring data revealed that diatom communities were closely correlated with precipitation, depth to the water table, conductivity, nitrate and temperature. Sedimentary records revealed that temporal changes in diatom assemblages and geochemical elements displayed similar trends in two peat cores after the 1950s. The first gradient in diatom composition represented a shift from Pinnularia species to taxa preferring less-acidic habitats, which was closely linked to climate warming and the enrichment of inorganic elements (e.g. sodium and calcium) since the early 20th century. Meanwhile, changes in diatom communities were further related to precipitation variability, atmospheric deposition and local hydrogeomophic setting. Taken together, the succession of diatom communities was closely linked to climate-regulated availability of nutrients and moisture in this subtropical peatland over the last two centuries. In order to achieve sustainable management of these scarce peatlands, further biological monitoring and paleoecological studies are needed to improve our knowledge of peatland ecosystem evolution in response to future climate change.