Plant community modification may play an important role in peatlands’ carbon balance. We investigated how Molinia caerulea altered CO2 and CH4 fluxes and DOC concentration as well as their sensitivity to water table level, air and soil temperature in Sphagnum-dominated peat mesocosms. The presence of Molinia caerulea significantly increased CO2 and CH4 emissions compared to Sphagnum and decreased the DOC concentration. The rise in temperature exponentially increased DOC as well as CO2 and CH4 emissions. Molinia caerulea decreased the temperature sensitivity of CO2 emissions, suggesting the presence of a more labile substrate (root exudates), while it increased the temperature sensitivity of CH4 emissions, suggesting a possible change in methanogenic communities. Our study highlights a strong impact of vegetation change on C dynamics in peatlands.