Climate change can shift rainfall into fewer, more intense events with longer dry periods, leading to changes in peatland hydrology and carbon cycling. We manipulated rain events over three peatland plant types (moss, sedge, and shrub). We found increasing regime intensity led to drier surface soils and deeper water tables, reducing plant carbon uptake. Mosses became sources of CO₂ after >3 consecutive dry days. This study shows peatlands may become smaller sinks for carbon due to rain changes.