Climate change may cause increasing tree cover in boreal peatlands, and the impacts of this encroachment will be noted first at forested-to-open bog ecotones. We investigate key metrics of ecosystem function in five such ecotones at a peatland complex in Western Siberia. Stratigraphic analysis of three cores from one of these transects shows that the ecotone has been dynamic over time with evidence for recent expansion of forested peatland. We observed that the two alternative states for northern boreal peatlands (forested/open) clearly support distinct plant and microbial communities. These in turn drive and respond to a number of feedback mechanisms. This has led to steep ecological gradients across the ecotones. Tree cover was associated with lower water tables and pH, along with higher bulk density, aquatic carbon concentrations, and electrical conductivity. We propose that the conditions found in the forested peatland of Western Siberia make the carbon sink more vulnerable to warmer and drier conditions.