Successful peatland restoration trials have demonstrated the ability to restore carbon (C) sink status to anthropogenically disturbed peatlands, reinforcing interest in including them as nature-based climate solutions (NbS) in Canada. However, even when standard best-practice methods such as the moss layer transfer technique (MLTT) are applied, restored peatlands are unlikely to recover as ecologically uniform systems. Differences in landscape position, residual peat surface elevation, and resulting depth to the water table can create a range of localized moisture niches within a restored site. These ecohydrological gradients shape plant community development, and because vegetation and hydrology jointly regulate greenhouse gas (GHG) exchange and peat accumulation, they are expected to produce divergent carbon (C) outcomes. We therefore examined how hydrologic variability influenced vegetation development and C dynamics across multiple ecohydrologic assemblages at a former peat-extracted site in northeastern Alberta, 17 years after restoration with MLTT using a donor Sphagnum community. We measured growing-season carbon dioxide (CO₂) and methane (CH₄) exchange and quantified recent peat accumulation. The assemblages differed markedly, with each exhibiting strengths in different metrics (e.g., lower CH₄ emissions, reduced soil respiration, higher gross primary productivity, greater C sequestration, higher moss cover, etc.). In 2025, all assemblages were similar net C sinks; however, areas with extensive Sphagnum moss cover, maintained by long term seasonally wet, but not inundated conditions, achieved the greatest new peat accumulation and C sequestration since restoration. These findings highlight the importance of early Sphagnum establishment for maximizing long-term soil C sequestration in restored ombrotrophic peatlands.