To establish the temporal and spatial variability of substrate contribution to ecosystem respiration (ER), we measured the seasonal and inter-annual microbial carbon dioxide (CO2) production potential, microbial biomass, and nitrogen dynamics over a period of 2 years in the upper 30 cm of a peat bog in southern Ontario. Samples collected during a warmer year with lower average summer water table position had larger inorganic and organic nitrogen (N) concentrations and microbial CO2 production potentials. Across all sampling dates, the distance of the water table beneath the surface was significantly and positively correlated with N availability, and in turn N availability was significantly and positively correlated with CO2 production, although direct correlation between water table position and CO2 production was only significant at P = 0.1. Inter-seasonal variability in CO2 production, microbial biomass, or N did not follow consistent patterns between years, and inorganic N species, particularly nitrate, concentrations varied relatively the most between sampling dates, although concentrations were always small relative to microbial biomass N and potassium sulfate- extractable organic N. Microbial CO2 production from the surface peat profile was calculated to be between 2.5 and 5.7 g CO2 m−2 day−1. Data extrapolation showed that microbial production of CO2 can be between 41 and 67% of the CO2 emitted as ER with the larger value falling in a warmer, drier year and that inter-annual changes in production potentials may partially explain increased ER in warmer, drier years. These results suggest that changes in microbial CO2 production and microbial community and nutrient characteristics may play an important role in controlling the emission of CO2 from terrestrial ecosystems such as peatlands.