Species in the genus Sphagnum create, maintain, and dominate boreal peatlands through ‘extended phenotypes’ that allow these organisms to engineer peatland ecosystems and thereby impact global biogeochemical cycles. One such phenotype is the production of peat, or incompletely decomposed biomass, that accumulates when rates of growth exceed decomposition. Interspecific variation in peat production is thought to be responsible for the establishment and maintenance of ecological gradients, such as the microtopographic hummock-hollow gradient, along which sympatric species sort within communities. This study investigated the mode and tempo of functional trait evolution across 15 species of Sphagnum using data from the most extensive studies of Sphagnum functional traits to date and phylogenetic comparative methods. We found evidence for phylogenetic conservatism of the niche descriptor height-above-water-table and of traits related to growth, decay, and litter quality. However, we fail to detect the influence of phylogeny on interspecific variation in other traits such as shoot density and suggest that environmental context can obscure phylogenetic signal. Trait correlations indicate possible adaptive syndromes that may relate niche and its construction. This study is the first to formally test the extent to which functional trait variation among Sphagnum species is a result of shared evolutionary history.