Peatlands are an important global carbon reservoir. The continued accumulation of carbon in peatlands depends on the persistence of anoxic conditions, in part induced by water saturation, which prevents oxidation of organic matter, and slows down decomposition. Here we investigate how and over what time scales the hydrological regime impacts the geochemistry and the bacterial community structure of temperate peat soils. Peat cores from two sites having contrasting groundwater budgets were subjected to four controlled drought-rewetting cycles. Pore water geochemistry and metagenomic profiling of bacterial communities showed that frequent water table drawdown induced lower concentrations of dissolved carbon, higher concentrations of sulfate and iron and reduced bacterial richness and diversity in the peat soil and water. Short-term drought cycles (3–9 day frequency) resulted in different communities from continuously saturated environments. Furthermore, the site that has more frequently experienced water table drawdown during the last two decades presented the most striking shifts in bacterial community structure, altering biogeochemical functioning of peat soils. Our results suggest that the increase in frequency and duration of drought conditions under changing climatic conditions or water resource use can induce profound changes in bacterial communities, with potentially severe consequences for carbon storage in temperate peatlands.