The improvement of site hydrology is a major determinant of the success or failure of wetland restoration. Unfortunately, the influence of new hydrological conditions on wetland chemistry and nutrient cycling is often ignored or simply not monitored. This study assessed how changes in the composition of stream sediments that occurred after peatland stream restoration affected the pool and bioavailability of phosphorus (P) stored on the stream floor. The studied watercourses were located in the Narew River valley, NE Poland. They were restored in 2002 by excavating channels about 4–6m wide and 1–1.5m deep. Channels were cut through a peat layer to basal sands that underlay the organic deposits. Due to fallacious assumption about the high stability of peat stream banks, the banks were not modelled or protected by any technical measures to eliminate potential slump and erosion. Within a few years of the completion of the restoration project, peat bank failures led to the substantial deposition of organic material onto the floor of the newly created water-bodies. This resulted in an increase in the mean total phosphorus (TP) concentration in the sediment from 19μmolg⁻¹ to more than 35μmolg⁻¹ as well as an increase in both the concentration and pool of potentially mobile P fractions. A potential for the release of P was confirmed by the change in the concentration of P fractions that has been recorded over the summer period. Between June and October 2008 their content in the top 1-cm layer diminished from 134.1mmolm⁻² to 100.6mmolm⁻², implying an average net release of P of about 0.3mmolm⁻²day⁻¹. This suggests that examined sediments primarily act as a highly dynamic transformer system, being the sink for particulate organic and mineral forms of P and serving as the net source of bioavailable (soluble reactive phosphorus) SRP.