Peat mosses (Sphagnum) largely govern carbon sequestration in Northern Hemisphere peatlands. We investigated functional traits related to growth and decomposition in Sphagnum species. We tested the importance of environment and phylogeny in driving species traits and investigated trade-offs among them. We selected 15 globally important Sphagnum species, representing four sections (subgenera) and a range of peatland habitats. We measured rates of photosynthesis and decomposition in standard laboratory conditions as measures of innate growth and decay potential, and related this to realized growth, production, and decomposition in their natural habitats. In general, we found support for a trade-off between measures of growth and decomposition...