Boreal peatlands harbour large stores of carbon as peat below their surfaces. Climate change is expected to cause drying in northern peatlands, which will in turn impact the carbon balance of these ecosystems that is maintained by high water tables and the hydrologically sensitive plants growing there. This study aims to quantify how vegetation will be structured (I) and photosynthesize (II, III) in a future climate as emulated by long-term water level drawdown (WLD). To do this, changes in the vegetation and its photosynthesis after WLD are linked, and the response of Sphagnum mosses to periodic drought is investigated. Field measurements were done at a long-term WLD field experiment that contained a rich (mesotrophic) fen, a poor (oligotrophic) fen and a bog (ombrotrophic) site. Measurements included vegetation surveys from existing permanent sample plots and leaf-level carbon dioxide exchange measurements. For an experiment in controlled conditions peatland surface cores from this field experiment were transported to a greenhouse where the photosynthesis of lawn Sphagna during and after an experimental periodic drought was measured. The field study revealed that the response of peatland vegetation to WLD depend on peatland type. The species composition in the rich fen was the most impacted by WLD, while the bog vegetation demonstrated stability. Similarly, large increases in photosynthesis occurred following WLD on the vascular plant-covered rich fen, while changes were negligible on the Sphagnum-carpeted bog. The vegetation on the two fens shifted from an open sedge-, or sedge and Sphagnum-dominated ecosystem, to a tree-dominated ecosystem. Canopy development following WLD further accelerated vegetation changes by shading and sheltering the understorey vegetation. Vascular plants were the most likely to increase productivity from WLD as they are best suited to utilize the nutrients made available by peat mineralization, while Sphagnum moss photosynthesis was impacted little. The greenhouse study revealed that lawn Sphagnum mosses exposed to long-term WLD were more vulnerable to drought compared to those from wet sites. Large capitula typical to fen Sphagnum species appeared to be beneficial for surviving periodic drought. This work demonstrated that climate change as emulated by long-term WLD will have a large impact on the vegetation composition of northern peatlands and increase photosynthetic function of these ecosystems, fens in particular. To better predict climate feedbacks from these changes, carbon dynamics including peatland vegetation dynamics should be updated in global process models. Future research to better understand the tipping point of different peatland types after WLD in different climatic regions will help us to predict changes in these diverse and globally important systems.