Eriophorum angustifolium (Cyperaceae) is a pioneer clonal sedge colonizing bare peat surface of harvested peatlands in central Europe. It forms circular patches of densely aggregated ramets, followed by central die-back and ring formation as circles develop. This study experimentally tested the importance of inter-ramet competition, interference with litter, soil nutrient depletion, and architectural constraints for radial clonal spread and ring formation process. Effects of fertilization, litter addition and competition of neighbor ramets on growth and survival of tillers transplanted into four distinct zones within individual circle were detected only in the first zone (green band) with high ramet density. This suggested that both above-ground competition for light and below-ground competition for soil nutrients can play an important role in population dynamics of E. angustifolium. A field study of clonal growth has shown that rhizomes orient preferentially towards the periphery. As the old ramets within the interior of the tussock died due to senescence and inter-ramet competition, disproportionately more ramets are recruited on the periphery, which reduce axillary bud availability within the interior of the tussocks. We also explored the soil nutrient content (NH4-N, NO3-N and PO4-P). High values of NO3-N outside the circles and low values inside patches might partly explain why Eriophorum rhizomes are oriented into open space. High accumulation of phosphorus (PO4-P) in the centre of the patches was attributed to the leaching of phosphorus from decaying Eriophorum plants. We suggest that processes of nutrient foraging and utilization are responsible for development of circular patches of E. angustifolium in the harsh environment of cut-away peatland.