The restoration of former peat extraction areas offers an opportunity to integrate nature-based solutions (NbS) into post-extraction land use, enhancing carbon sequestration, biodiversity, and water retention. By rewetting degraded peatlands and implementing NbS-based land-use strategies such as wetland creation and Sphagnum moss re-establishment, these areas can regain essential ecosystem functions while contributing to the EU Green Deal’s climate objectives. However, obtaining sciece-based evidence for the long-term success of these measures requires continuous monitoring to assess their effectiveness in reducing greenhouse gas emissions and improving ecosystem resilience. This study examines how different post-extraction land-use options affect water quality, greenhouse gas emissions, and biodiversity in the former Komppasuo peat extraction area. Baseline measurements were conducted before restoration, and ongoing monitoring tracks the site's recovery into a carbon sink. Key methods include hydrological monitoring, greenhouse gas flux measurements, and standardized vegetation and bird surveys. Active and passive vegetation reintroduction and optimized water level management have been tested to reduce peat decomposition. Drone imagery has been used to monitor spatial changes, providing valuable insights into vegetation development and wetland formation dynamics. Results show that vegetation recovery has progressed rapidly, especially in ash-treated areas, where the pre-treatment has enhanced plant establishment. Wetland habitats have developed diverse ecological conditions, supporting increased species diversity and altering bird community composition. The introduction of water level management structures has facilitated hydrological stabilization, but further adjustments may be needed to optimize conditions for peat-forming vegetation. Initial greenhouse gas data indicate that CO₂ emissions have decreased, but methane fluxes remain variable and require further long-term monitoring to determine net climate effects. Water quality results show that restoration has increased nutrient loading to downstream waters, and after removing peat extraction-related water protection structures, runoff is more nutrient-rich than during peat extraction. These findings underline the importance of site-specific management strategies to minimize unintended environmental impacts while maximizing restoration benefits. Peatland restoration requires balancing multiple, sometimes conflicting, objectives. Hydrological restoration can improve carbon sequestration potential but may temporarily increase methane emissions and nutrient leaching. Long-term monitoring is essential to determine whether degraded peatlands can become carbon sinks and how different land-use strategies influence this process. A critical zone approach is needed in the monitoring framework to fully understand complex interactions between hydrology, soil processes, vegetation dynamics, and greenhouse gas fluxes. Restoring hydrological connectivity is particularly important for ensuring long-term ecosystem recovery and stability.