The relative importance of global versus local environmental factors for growth and thus carbon uptake of the bryophyte genusSphagnum-the main peat-former and ecosystem engineer in northern peatlands-remains unclear. We measured length growth and net primary production (NPP) of two abundantSphagnumspecies across 99 Holarctic peatlands. We tested the importance of previously proposed abiotic and biotic drivers for peatland carbon uptake (climate, N deposition, water table depth and vascular plant cover) on these two responses. Employing structural equation models (SEMs), we explored both indirect and direct effects of drivers onSphagnumgrowth. Variation in growth was large, but similar within and between peatlands. Length growth showed a stronger response to predictors than NPP. Moreover, the smaller and denserSphagnum fuscumgrowing on hummocks had weaker responses to climatic variation than the larger and looserSphagnum magellanicumgrowing in the wetter conditions. Growth decreased with increasing vascular plant cover within a site. Between sites, precipitation and temperature increased growth forS. magellanicum. The SEMs indicate that indirect effects are important. For example, vascular plant cover increased with a deeper water table, increased nitrogen deposition, precipitation and temperature. These factors also influencedSphagnumgrowth indirectly by affecting moss shoot density. Synthesis. Our results imply that in a warmer climate,S. magellanicumwill increase length growth as long as precipitation is not reduced, whileS. fuscumis more resistant to decreased precipitation, but also less able to take advantage of increased precipitation and temperature. Such species-specific sensitivity to climate may affect competitive outcomes in a changing environment, and potentially the future carbon sink function of peatlands.