Here we investigate the response of soils and litter to 5 years of experimental additions of ammonium (NH4), nitrate (NO3), and ammonia (NH3) to an ombrotrophic peatland. We test the importance of direct (via soil) and indirect (via litter) effects on phosphatase activity and efflux of CO2. We also determined how species representing different functional types responded to the nitrogen treatments. Our results demonstrate that additions of NO3, NH4 and NH3 all stimulated phosphatase activity but the effects were dependent on species of litter and mechanism (direct or indirect). Deposition of NH3 had no effect on efflux of CO2 from Calluna vulgaris litter, despite it showing signs of stress in the field, whereas both NO3 and NH4 reduced CO2 fluxes. Our results show that the collective impacts on peatlands of the three principal forms of nitrogen in atmospheric deposition are a result of differential effects and mechanisms on individual components.