Abstract Historical peatland drainage resulted in surface subsidence and reduced water storage capacity (WSC), a process that can be exacerbated by climate change. We assessed the effects of rewetting on WSC using mesocosm experiments in climate chambers, field measurements, and Interferometric Synthetic Aperture Radar (InSAR) analysis. Results showed that rewetting significantly increased WSC under both present and future RCP 4.5 climates, with stronger effects where Sphagnum moss recovery may restore surface porosity. Rewetting enhances WSC under shallow antecedent water levels (WLs) and high precipitation, despite reduced vertical storage, due to living Sphagnum moss and porous near‐surface peat. Field validation confirmed increased WSC adjacent to the original ditches. In addition, InSAR analysis detected accelerated peat uplift post‐rewetting compared with pristine peatland conditions. These results demonstrate that rewetting effectively restores the flood control function of drained boreal peatlands, strengthens their resilience under climate change, and supports ecosystem recovery and climate adaptation strategies.