Boreal ecosystems are warming roughly twice as fast as the global average, resulting in woody expansion that could further speed up the climate warming. Boreal peatbogs are waterlogged systems that store more than 30% of the global soil carbon. Facilitative effects of shrubs and trees on the establishment of new individuals could increase tree cover with profound consequences for the structure and functioning of boreal peatbogs, carbon sequestration and climate. We conducted two field experiments in boreal peatbogs to assess the mechanisms that explain tree seedling recruitment and to estimate the strength of positive feedbacks between shrubs and trees. We planted seeds and seedlings of Pinus sylvestris in microsites with contrasting water-tables and woody cover and manipulated both shrub canopy and root competition. We monitored seedling emergence, growth and survival for up to four growing seasons and assessed how seedling responses related to abiotic and biotic conditions. We found that tree recruitment is more successful in drier topographical microsites with deeper water-tables. On these hummocks, shrubs have both positive and negative effects on tree seedling establishment. Shrub cover improved tree seedling condition, growth and survival during the warmest growing season. In turn, higher tree basal area correlates positively with soil nutrient availability, shrub biomass and abundance of tree juveniles. Synthesis. Our results suggest that shrubs facilitate tree colonization of peatbogs which further increases shrub growth. These facilitative effects seem to be stronger under warmer conditions suggesting that a higher frequency of warmer and dry summers may lead to stronger positive interactions between shrubs and trees that could eventually facilitate a shift from moss to tree-dominated systems.