Peatlands are among the largest long-term soil carbon stores, but their degradation can lead to significant carbon losses. This study considers the carbon budget of peat-covered sites after restoration, following degradation by past wildfires. The study measured the carbon budget of eight sites: four restored-revegetated sites, two unrestored bare soil control sites, and two intact vegetated controls over two years (2006-2008). The study considered the following flux pathways: dissolved organic carbon (DOC); particulate organic carbon (POC); dissolved carbon dioxide (CO(2)); primary productivity; net ecosystem respiration, and methane (CH(4)). The study shows that unrestored, bare peat sites can have significant carbon losses as high as 522 +/- 3 tonnes C/km(2)/yr. Most sites showed improved carbon budgets (decreased source and/or increased sink of carbon) after restoration; this improvement was mainly in the form of a reduction in the size of the net carbon source, but for one restored site the measured carbon budget after four years of restoration was greater than observed for vegetated controls. The carbon sequestration benefit of peatland restoration would range between 122 and 833 tonnes C/km(2)/yr.