Northern boreal peatlands are important ecosystems in modulating global biogeochemical cycles, yet their biological communities and related carbon dynamics are highly sensitive to changes in climate. Despite this, the strength and recent direction of these feedbacks are still unclear. The response of boreal peatlands to climate warming has received relatively little attention compared with other northern peatland types, despite forming a large northern hemisphere‐wide ecosystem. Here, we studied the response of two ombrotrophic boreal peatlands to climate variability over the last c. 200 years for which local meteorological data are available. We used remains from plants and testate amoebae to study historical changes in peatland biological communities. These data were supplemented by peat property (bulk density, carbon and nitrogen content), 14C, 210Pb and 137Cs analyses and were used to infer changes in peatland hydrology and carbon dynamics. In total, six peat cores, three per study site, were studied that represent different microhabitats: low hummock (LH), high lawn and low lawn. The data show a consistent drying trend over recent centuries, represented mainly as a change from wet habitat Sphagnum spp. to dry habitat S. fuscum. Summer temperature and precipitation appeared to be important drivers shaping peatland community and surface moisture conditions. Data from the driest microhabitat studied, LH, revealed a clear and strong negative linear correlation (R2 = .5031; p < .001) between carbon accumulation rate and peat surface moisture conditions: under dry conditions, less carbon was accumulated. This suggests that at the dry end of the moisture gradient, availability of water regulates carbon accumulation. It can be further linked to the decreased abundance of mixotrophic testate amoebae under drier conditions (R2 = .4207; p < .001). Our study implies that if effective precipitation decreases in the future, the carbon uptake capacity of boreal bogs may be threatened.