Monthly variation in accumulation and release of phenolics in bryophytes, and their allelopathic effects are little known despite their ecological significance. We conducted a field transplant experiment to investigate Sphagnum growth and extracellular enzymes that modulate phenolic contents and release along water table level (WTL) gradient. Specifically, we assessed monthly changes in height increment, phenolic release, and allelopathic effect during the growing season, as well as extracellular enzymes at the end of the experiment, for the two Sphagnum species: Sphagnum angustifolium C.E.O. Jensen, 1896, a hollow dwelling species, and Sphagnum magellanicum Bridel, 1798, a hummock species. Both Sphagnum species showed season- and WTL-dependent height increment and released phenolics. Sphagnum angustifolium exhibited negative allelopathy regardless of WTL, while S. magellanicum demonstrated mainly positive allelopathy at high WTL and negative allelopathy at low WTL. The degree of allelopathy was not contingent on phenolic release, but phenolic production was negatively correlated with height growth of the two species at their atypical habitats. Moreover, phenoloxidase or peroxidase did not show high activity at low WTL compared to high WTL. Our findings demonstrate for the first time that the strength and direction of allelopathy in Sphagnum may vary depending on the growing precipitation and temperature, WTL, and inter- and intraspecific trait variability. Longer term experiments may further elucidate the seasonal dynamics and mechanism of Sphagnum allelopathy.