In boreal peatlands, low decomposition rate is the underlying cause of carbon sequestration. Decomposition of litter can be affected by factors relating to soil moisture and temperature, the quality of the litter, and by the biotic decomposer community, among others. Exploring how these drivers interact will provide better understanding of carbon dynamics in boreal peatlands. We measured the decomposition of three common peatland plant functional types (moss, sedge, shrub), and associated microarthropod communities using litterbags placed in hollows (wet depressions) and hummocks (dry, raised areas) of a boreal peatland in Ontario, Canada. Decomposition was significantly different between all plant litter types, and greatest in sedge, but was not significantly different between hummock and hollow microhabitats. The decomposer community displayed an opposite pattern, significantly affected by microhabitat where richness and abundance of microarthropods was greater in hollows than hummocks. Oribatid mites were the dominant microarthropod with respect to both richness and abundance. Plant litter type did not affect community structure in hollows, but was a determinant of oribatid dominance in hummocks. These results suggest that abiotic environmental conditions are the main drivers of community structure for decomposers, while plant litter quality is a more important determinant of decomposition dynamics in boreal peatlands.