Peatlands are important sinks of atmospheric carbon (C) that, in response to climate warming, are undergoing dynamic vegetation succession. Here we examined the hypothesis that the uptake of nutrients by different plant growth forms (PGFs) is one key mechanism driving changes in species abundance in peatlands. Along an altitude gradient representing a natural climate experiment, we compared the variability of the stable C isotope composition (δ13C) and stable nitrogen (N) isotope composition (δ15N) in current-year leaves of two major PGFs, i.e. ericoids and graminoids. The climate gradient was associated with a gradient of vascular plant cover, which was parallelled by different concentrations of organic and inorganic N as well as the fungal/bacterial ratio in peat. In both PGFs the 13C natural abundance showed a marginal spatial decrease with altitude and a temporal decrease with progression of the growing season. Our data highlight a primary physical control of foliar δ13C signature, which is independent from the PGFs. Natural abundance of foliar 15N did not show any seasonal pattern and only in the ericoids showed depletion at lower elevation. This decreasing δ15N pattern was primarily controlled by the higher relative availability of organic versus inorganic N and, only for the ericoids, by an increased proportion of fungi to bacteria in soil. Our space-for-time approach demonstrates that a change in abundance of PGFs is associated with a different strategy of nutrient acquisition (i.e. transfer via mycorrhizal symbiosis versus direct fine-root uptake), which could likely promote observed and predicted dwarf shrub expansion under climate change.