The effect of climate change on peatlands is of great importance due to their large carbon stocks. In this study, we examined microbial biomass and effect of temperature and O2 availability on soil respiration of surface and subsurface Sphagnum peat. The interactive effect of biotic and abiotic factors significantly affects soil respiration. Increasing temperature enhanced the microbial respiratory activity and thus the soil respiration, while there is a temperature threshold. The more decomposed subsurface peat showed a lower CO2 production due to less labile carbon and lower microbial biomass, but a higher temperature sensitivity. Q10 of aerobic respiration increased from 1.93 ± 0.26 in surface to 2.20 ± 0.01 in subsurface peat. The linear relationship between Q10 and depth in the uppermost 50 cm peat section can be used to improve the estimation of CO2 production in peat profiles.