Indonesia has experienced frequent fires due to the lowering of groundwater levels caused by drainage via extensive canal networks for agricultural development since the 1970s. However, the impact of canals on fire emissions is still poorly understood. Here we investigate canal impacts on smoke aerosol emissions for Indonesian peatland and non-peatland fires by quantifying the resulting changes of smoke aerosol emission coefficient (Ce) that represents total aerosol emissions released from per unit of fire radiative energy. First, we quantified the impacts of canal drainage and backfilling on water table depth (WTD) variations using field data and then expanded such impacts from field to regional scales by correlating field WTD to satellite terrestrial water storage (TWS) anomalies from Gravity Recovery and Climate Experiment. Second, we estimated Ce from fire radiative power and smoke-aerosol emission rates based on Moderate Resolution Imaging Spectroradiometer active fire and multi-angle implementation of atmospheric correction aerosol products. Finally, we evaluated the Ce variation with TWS anomalies. The results indicate: (a) Ce is larger in peatland fires than in non-peatland fires; (b) Ce increases significantly as TWS anomalies decrease for both peatland and non-peatland fires; and (c) Ce changes at nearly twice the rate in peatland for a given TWS anomaly range as in non-peatland. These phenomena likely result from the different fuel types and combustion phases prevalent under different moisture conditions. These findings support the Indonesian government’s recent peatland restoration policies and pave the way for improved estimation of tropical biomass burning emissions.