The net accumulation of remains of Sphagnum spp. is fundamental to the development of many peatlands. The effect of polyphenols from Sphagnum on decomposition processes is frequently cited but has barely been studied. The central area of the Rodmossamyran peatland (Sweden) is an open lawn that consists mostly of Sphagnum spp. with a very low contribution from vascular plants. In order to determine the effects of decay on sphagnum phenols, 53 samples of a 2.7 m deep core from this lawn were analysed with pyrolysis gas chromatography-mass spectrometry (pyrolysis-GC-MS) and compared with more traditional decomposition proxies such as C/N ratio, UV light transmission of alkaline peat extracts, and bulk density. Factor analysis of 72 quantified pyrolysis products suggested that the variation in 4-isopropenylphenol was largely determined by aerobic decomposition instead of Sphagnum abundance. In order to evaluate the effects of aerobic decay in Sphagnum peat, down-core records from different climatic regions were compared using molecular markers for plant biopolymers and C/N ratio. These included markers for lignin from vascular plants ((di) methoxyphenols), polyphenols from Sphagnum spp. (4-isopropenylphenol), and cellulose (levoglucosan). Our results indicate that polyphenols from Sphagnum are preferentially degraded over polysaccharides; consequently the variability of the marker for sphagnum acid, 4-isopropenylphenol, was found indicative of decomposition instead of reflecting the abundance of Sphagnum remains. The fact that 4-isopropenylphenol is aerobically degraded in combination with its specificity for Sphagnum spp. makes it a consistent indicator of past hydrological conditions in Sphagnum-dominated peat. In contrast, the variability of C/N records in Sphagnum-dominated peat was influenced by both vegetation shifts and decomposition, and the dominant effect differed between the studied peatlands. Our results provide direction for modelling studies that try to predict possible feedback mechanisms between peatlands and future climate change, and indicate that the focus in Sphagnum decay studies should be on carbohydrates rather than on phenolic compounds.