The carbon sink function of peatlands is the result of a relatively small imbalance between biomass production and decay and proposed to be sensitive to changes in environmental conditions. Thus, peat decomposition plays a decisive role in determining the future carbon balances of peatlands under changing climatic conditions and increasing human pressure. To evaluate the effects of peatland degradation on the degree of decomposition in light of deviating site histories and to reveal interrelations between different indicators, we analysed peat depth profiles of physicochemical peat decomposition proxies across nine study sites in two valley bogs in the Eastern Alps, Austria. For this purpose, we divided 1 m peat cores sampled at the nine sites into 4 cm sections and analysed these peat samples for bulk density, loss on ignition, pH value, carbon and nitrogen content and ratio, stable carbon and nitrogen isotope signatures, and five humification indices based on Fourier transform infrared spectroscopy. Besides, we regularly measured water levels and incubated litter bags over two years. Peat characteristics were found to be relatively homogenous across the treeless and only slightly degraded sites. At these sites, depth profiles followed similar patterns with strongly increasing decomposition in the uppermost layers and the highest degree of peat decomposition at 40–56 cm depths for most proxies. Thus, our findings suggest that even apparently only slightly degraded sites were distinctly affected by past drainages. In contrast to the open peat bog sites, the degree in peat decomposition was distinctly higher at tree-encroached sites and at long-term drained former peat-cutting sites. Both, the distinct difference in the degree of decomposition between the two peatlands and the inverse decomposition depth trends, i.e., more decomposed peat overlying less decomposed layers, highlight the importance of secondary decomposition on the depth profiles and the strong effects of site histories on the current degree of peat decomposition. The results of two-year litter bag incubations of four vascular plant species revealed distinct differences in species-specific litter decomposition rates and considerable differences for same species between the two investigated bogs. The strong interrelations between different humification indices underline the simultaneous effects of proceeding decay on the different chemical properties of the peat. Besides, humification indices were strongly related with other physical and chemical properties of peats and highest loadings on the principal component 1 that accounted for 41% of the total variance of the dataset were found for four different humification indices, bulk density and nitrogen contents. We conclude that the selective preservation of aliphatic, acid and aromatic groups during peat decomposition are well suited to elucidate small-scale differences in the degree of decomposition and to strongly interrelate with established indicators as bulk densities.