The extraction of peat for horticultural use requires peatland drainage and clearing of surface vegetation, converting these ecosystems from carbon sinks to sources. Once peat extraction ceases, sites can remain largely unvegetated for decades and remain persistent sources of atmospheric CO2. In order to return the peat-accumulation function to these ecosystems, ecological restoration is required. Over 25 years of research in Canada has resulted in the development of the moss-layer transfer technique for peatland restoration. Involving surface contouring, ditch blocking for rewetting, spreading donor material, and protection with straw mulch, this technique has been successful in establishing vegetation communities dominated by peatland species, including Sphagnum mosses. Moreover, this rewetting and vegetation establishment quickly returns carbon uptake, with ecosystem-scale measurements indicating sites can become annual carbon sinks within 15 years post-restoration. This long-term applied research program provides an excellent example of a university-industry partnership that has resulted in an innovative ecological restoration technique. The improved understanding of peatland ecosystem function gained during this research program is now being used to develop reclamation techniques for oil well-pads, access roads and open-pit mines.