Sulfate pollution of lakes and rivers is recognized as a serious problem in many regions of Central Europe, thus we evaluated the role of rewetted fens in mitigating sulfate pollution and tested if high sulfate concentrations in fen-feeding water counteract the re-establishment of their function as sinks for phosphorus (P). A long-term incubation experiment was conducted with highly decomposed peat from upper soil layers of fens that have been rewetted for 1 to 15 years. Periodic sulfate pulses to inundated peat mesocosms, equating to an annual loading of 50 g S m⁻², induced significant changes of sulfate consumption and phosphorus mobilization. Sulfate consumption of highly decomposed peat from all sampling sites was related to sulfate concentrations in overlying water (linear regression, p < 0.01). Sulfate additions also led to significant increases of P concentrations or P mobilization in peat porewater (t test, p < 0.05) and P concentrations in the overlying water were 2–3 times higher than in non-treated controls. In conclusion, rewetting of fens is an important tool to mitigate sulfate pollution of adjacent lakes and rivers. However, an elevated sulfate concentration in waters feeding the fen impairs P retention and increases P losses to adjacent surface waters.