Peatlands are critical for global climate regulation storing approximately 500 Gt of carbon and accounting for 33% of global soil organic carbon. These ecosystems provide essential wildfire resilience and are important pollutant sinks but degradation places these key ecosystem services at risk. Smelting operations in Sudbury, ON, Canada, released approximately 12 000 t of particulate copper and nickel into the atmosphere between 1883 and 1969. Toxic metal deposition on peatlands from smelting activities caused the widespread decline of keystone peatland moss species (Sphagnum) and altered peat hydrophysical properties. Combined this likely reduces peatland resilience to drought and wildfires, thereby increasing the potential for toxic heavy metal remobilisation. However, these peat properties changes have yet to be quantified. We determine 1) how historical smelter pollution impacts peat hydrophysical properties by measuring bulk density, saturated hydraulic conductivity and soil water retention in both undisturbed and smelter-impacted peatlands, 2) explore the vulnerability of these peatlands to wildfires and drought and 3) assess the potential for natural Sphagnum moss recovery. Smelter-impacted peat had a significantly higher bulk density, lower macroporosity and saturated hydraulic conductivity that drove large differences in modelled soil water tension profiles during simulated drying events. These differences render smelter-impacted peat more susceptible to smouldering combustion than undisturbed peat. Additionally, the smelter-impacted peat properties likely contributed to the limited Sphagnum moss recovery, while concurrently increasing drought and wildfire risk. We argue that contaminated peatland restoration is necessary to enhance Sphagnum moss recovery to mitigate toxic metal remobilisation risk from drought and wildfire.