The preservation of endangered species requires clarifying habitat preferences through survival, growth and competitive ability. The determinants of habitat differentiation between the endangered species, Drosera anglica, and a widespread congener, D. rotundifolia, were compared. The effects of water level, Sphagnum mats and overstory vascular plants on Drosera distribution, recruitment and survival were monitored at a previously mined Sphagnum peatland. Seedling transplant experiments were conducted using different water levels. Seed-sowing experiments were conducted using different light intensities in three habitat-types: bare ground, Sphagnum mat and waterlogged surface. Distributions of D. anglica and D. rotundifolia were determined using survival at the seedling stage. D. anglica seedling recruitment and survival occurred more at lower water levels and/or lower plant cover, while D. rotundifolia seedlings established independent of these factors. In the greenhouse the seedlings of both species survived better at lower water levels but grew more slowly. D. anglica seedlings reduced their growth under shade more than D. rotundifolia. D. anglica showed low competitive light and nutrient ability on Sphagnum mats. Therefore, D. anglica was pushed to areas of high water levels where few competitors could establish. The habitat differentiation between D. anglica and D. rotundifolia originated from the interactions with Sphagnum mats.