Peatlands play an important role in global carbon cycling, but their responses to long-term anthropogenically changed hydrologic conditions and nutrient infiltration are not well known. While experimental manipulation studies, e.g., fertilization or water table manipulations, exist on the plot scale, only few studies have addressed such factors under in situ conditions. Therefore, an ecological gradient from the center to the periphery of a continental Canadian peatland bordering a eutrophic water reservoir, as reflected by increasing nutrient input, enhanced water level fluctuations, and increasing coverage of vascular plants, was used for a case study of carbon cycling along a sequence of four differently altered sites. We monitored carbon dioxide (CO2) and methane (CH4) surface fluxes and dissolved inorganic carbon (DIC) and CH4 concentrations in peat profiles from April 2014 through September 2015. Moreover, we studied bulk peat and pore-water quality and we applied 13C–CH4 and 13C–CO2 stable isotope abundance analyses to examine dominant CH4 production and emission pathways during the growing season of 2015. Our study illustrates accelerated carbon cycling in a strongly altered peatland with consequences for CO2 and CH4 budgets. However, our results suggest that long-term excess nutrient input does not necessarily lead to a loss of the peatland carbon sink function.