This paper describes the first application of compound-specific stable carbon isotope and radiocarbon isotope analyses to the investigation of microbial processes in peat deposits. Carbon recycling in both modern and ancient peats is fundamental in assessing the release of methane to the atmosphere. Important relicts of carbon recycling observed in Holocene peat deposits are reservoir effects, in which the peat is as much as 200 14C yr older than its actual age. This appears to be related to either consumption of large quantities of microbially respired CO2 or smaller quantities of relatively older methane. We sought evidence for such recycling in two Holocene peat deposits. High abundances of methanogen biomarkers suggest that methanogenesis was a significant process. However, we found neither molecular nor isotopic evidence for methanotrophic activity; while this does not preclude such activity, it suggests that it was not sufficiently important to influence the 14C composition of the bulk peat. Likewise, compound-specific radiocarbon dates of bacterial and higher plant biomarkers were not significantly different from the dates of bulk peat, indicating that the reservoir effect was not focused in a specific subfraction of biomass. Instead, we propose that old carbon was incorporated directly into the peat-forming vegetation via fixation of old CO2.