Peatland ecosystem services include drinking water provision, flood mitigation, habitat provision and carbon sequestration. Dissolved organic carbon (DOC) removal is a key treatment process for the supply of potable water downstream from peat-dominated catchments. A transition from peat-forming Sphagnum moss to vascular plants has been observed in peatlands degraded by (a) land management, (b) atmospheric deposition and (c) climate change. Here within we show that the presence of vascular plants with higher annual above-ground biomass production leads to a seasonal addition of labile plant material into the peatland ecosystem as litter recalcitrance is lower. The net effect will be a smaller litter carbon pool due to higher rates of decomposition, and a greater seasonal pattern of DOC flux. Conventional water treatment involving coagulation-flocculation-sedimentation may be impeded by vascular plant-derived DOC. It has been shown that vascular plant-derived DOC is more difficult to remove via these methods than DOC derived from Sphagnum, whilst also being less susceptible to microbial mineralisation before reaching the treatment works. These results provide evidence that practices aimed at re-establishing Sphagnum moss on degraded peatlands could reduce costs and improve efficacy at water treatment works, offering an alternative to ‘end-of-pipe’ solutions through management of ecosystem service provision.