‘Ecosystem engineers’ have a critical role in the structure and function of natural communities and need to be considered as focal species to enable successful conservation or restoration of ecosystems. Through introduction and/or managing a single species, an entire community can be influenced. In our study we show that Pedicularis palustris, an endangered hemiparasite in large parts of Europe, can act as an ‘ecosystem engineer,’ speeding up the restoration of undrained fen-meadow ecosystems colonised by species-poor and resistant Carex acuta vegetation. The parasitic behavior of Pedicularis palustris on tall sedges significantly alters local plant diversity, biomass production and soil characteristics. Our experiments show that, under the right hydrological conditions and mowing management practice, several target species for nature conservation can benefit from the gaps it creates in above-ground Carex acuta vegetation and its dense below-ground root system. The more prominent presence of mosses and lower density of the topsoil stimulates the recovery of mesotrophic transition mire with active peat formation. Since this habitat type is specifically protected under the European Habitat Directive, (re)introduction of Pedicularis palustris in similar sites within its geographical distribution range in Europe may be a helpful tool to achieve the imposed obligations for appropriate management and restoration.