While iron (Fe) has been proposed to constrain dissolved organic carbon (DOC) export by forming precipitation (Fe-OC) in peatlands, uncertainties remain about the potential interactions between Fe and nitrogen. Such interactions are important for Fe and carbon exports as they can dissolve the Fe-OC through Fe reduction. Here we studied the reduction of ferrihydrite-OC (Fh-OC) following incubation with microbes from agricultural and natural peatlands under differing nitrogen availability, with high-throughput sequencing to identify microbial mechanisms. Our results showed that in agricultural peatlands, high nitrogen levels (>100 mg kg−1) modified the composition and abundance of iron-reducing bacteria, increasing reduction rates of Fh-OC (0.09–0.20 kg Fe day−1 ha−1) above the low N treatments (<100 mg kg−1) (p < 0.05). However, reduction rates of Fh-OC and iron-reducing community in natural peatlands were far less affected. Our findings suggest that N-induced microbial reduction of Fe-OC may create the potential for greater Fe and carbon exports from agricultural peatlands to aquatic systems.