Peatlands are ecosystems vital for carbon sequestration and hold significant amounts of carbon and nitrogen in their soils. The drainage of peatlands has transformed them from carbon sinks to sources. This study investigates the impacts of drainage on the carbon and nitrogen dynamics in soil and water in peatlands in southern Sweden. By comparing a drained peatland, scheduled to be restored, with a nearby recovered peatland, this study assessed differences in soil and water properties, focusing on moisture content, total organic matter (TOM), total carbon (TC), nitrogen in both soil and water and dissolved organic carbon (DOC). Field soil samples were collected from six points in each site using a drill followed by laboratory analysis. Five water samples were collected at each site and analyzed. Results indicate that the two sites had similar soil moisture values, TOM, TC, and nitrogen in both soil and water. However, the drained site had significantly higher water DOC values, suggesting greater carbon loss in drained peatlands. The finding indicates that more carbon per area is stored in the recovered area due to the significantly thicker peat layer. The findings highlight the potential benefits of rewetting drained peatlands for carbon and nitrogen retention. Rewetting may mitigate carbon loss and promote long-term carbon storage, although the full recovery of soil carbon and ecosystem functions may take centuries. The study highlights the need for further research to understand the complex interactions between carbon and nitrogen cycles in peatland restoration while providing comparable data, making it possible to see trends over time when the drained area has been rewetted.