Factors limiting the production of the greenhouse gases nitrous oxide (N 2 O) and carbon dioxide (CO 2 ) were investigated in three incubation experiments conducted with soil from top-and subsoil horizons of a peatland which had an acid sulphate mineral subsoil derived from black schists. The effect of moisture was investigated by equilibrating undisturbed soil samples from three horizons (H2, Cg and Cr) at − 10, − 60 or − 100 cm matric potential and measuring the gas production. In the second experiment, the effects of temperature and various substrates were studied by incubating disturbed soil samples in aerobic conditions at 5 or 20 • C, and measuring basal respiration and N 2 O production before and after adding water, glucose or ammonium into the soil. In the third experiment, the effects of added glucose and/or nitrate on the denitrification in soil samples from four horizons (H1, H2, Cg and Cr were investigated by acetylene inhibition and monitoring of N 2 O production during a 48-h anaerobic incubation. The production of CO 2 in the topmost peat horizon was largest at − 10 cm matric potential, and it was larger than those in the mineral subsoil also at − 60 and − 100 cm potentials. In contrast, drainage seemed to increase N 2 O production, whereas in the wettest condition the production of N 2 O in the mineral subsoil was small and the peat horizon was a sink of N 2 O. Lowering of temperature (from 20 • C to 5 • C) decreased CO 2 production, as expected, but it had almost no role in the production of N 2 O in aerobic conditions. Glucose addition increased the aerobic production of CO 2 in peat, but it had a minor effect in the mineral horizons. Lack of C source (glucose) was limiting anaerobic N 2 O production in the uppermost peat horizon, while in all other horizons, nitrate proved to be the most limiting factor. It is concluded that peatlands with black schist derived acid sulphate subsoil horizons, such as in this study, have high microbial activity in the peaty topsoil horizons but little microbial activity in the mineral subsoil. These findings are contrary to previous results obtained in sediment-derived acid sulphate soils.