Peatlands store 30% of the world's terrestrial soil carbon (C) and those located at northern latitudes are expected to experience rapid climate warming. We monitored growing season carbon dioxide (CO₂) fluxes across a factorial design of in situ water table (control, drought, and flooded plots) and soil warming (control vs. warming via open top chambers) treatments for 2 years in a rich fen located just outside the Bonanza Creek Experimental Forest in interior Alaska. The drought (lowered water table position) treatment was a weak sink or small source of atmospheric CO₂ compared to the moderate atmospheric CO₂ sink at our control. This change in net ecosystem exchange was due to lower gross primary production and light-saturated photosynthesis rather than increased ecosystem respiration. The flooded (raised water table position) treatment was a greater CO₂ sink in 2006 due largely to increased early season gross primary production and higher light-saturated photosynthesis. Although flooding did not have substantial effects on rates of ecosystem respiration, this water table treatment had lower maximum respiration rates and a higher temperature sensitivity of ecosystem respiration than the control plot. Surface soil warming increased both ecosystem respiration and gross primary production by approximately 16% compared to control (ambient temperature) plots, with no net effect on net ecosystem exchange. Results from this rich fen manipulation suggest that fast responses to drought will include reduced ecosystem C storage driven by plant stress, whereas inundation will increase ecosystem C storage by stimulating plant growth. ?? 2009 Springer Science+Business Media, LLC.