Time series of vegetation indices derived from satellite imagery are useful in measuring vegetation response to climate warming in remote northern regions. These indices show that productivity is generally declining in the boreal forest, but it is unclear which components of boreal vegetation are driving these trends. We aimed to compare trends in the normalized difference vegetation index (NDVI) to forest growth and demographic data taken from a 10 ha mapped plot located in a spruce-dominated boreal peatland. We used microcores to quantify recent growth trends and tree census data to characterize mortality and recruitment rates of the three dominant tree species. We then compared spatial patterns in growth and demography to patterns in Landsat-derived maximum NDVI trends (1984–2019) in 78 pixels that fell within the plot. We found that NDVI trends were predominantly positive (i.e., “greening”) in spite of the ongoing loss of black spruce (the dominant species; 80% of stems) from the plot. The magnitude of these trends correlated positively with black spruce growth trends, but was also governed to a large extent by tree mortality and recruitment. Greening trends were weaker (lower slope) in areas with high larch mortality, and high turnover of spruce and birch, but stronger (higher slope) in areas with high larch recruitment. Larch dominance is currently low (~11% of stems), but it is increasing in abundance as permafrost thaw progresses and will likely have a substantial influence on future NDVI trends. Our results emphasize that NDVI trends in boreal peatlands can be positive even when the forest as a whole is in decline, and that the magnitude of trends can be strongly influenced by the demographics of uncommon species.