Widespread degradation of Indonesian peatlands by deforestation and excessive drainage results into more frequent fires, particularly in El Niño years, which causes: (i) release of enormous amounts of peat soil carbon to the atmosphere, impacting climate, (ii) severe air pollution, affecting human health and air traffic, and (iii) decreased ecosystem services through loss of biodiversity. Groundwater table decline is the main driver of these negative processes and, therefore restoration of peatland hydrology is essential. Although groundwater table depth is critical to counteract peatland degradation, optimal depths are not generic for all peatlands, but depend on peat physical properties (i.e. water retention, unsaturated conductivity), which are related to the degree of peat humification (Fibric, Hemic, Sapric). Unfortunately only few of these peat physical properties are available while they are essential input data in hydrological models required to extend the usually short observed groundwater hydrographs. An experiment with the Soil-Water-Atmosphere-Plant model (SWAP) for two locations in Indonesian peatlands illustrates the impact of the degree of peat humification on physical properties and thereby on calculated groundwater table depth, hydrological drought and associated fires hazards. The Variable Threshold Method is applied to convert groundwater table depths into hydrological drought, and next the modified Keetch-Byram Drought Index (mKBDI) is used to assess wildfire hazard. Peat physical properties that reflect higher peat humification (Hemic and Sapric) result into lower water tables during dry periods, in particular during El Niño years, more severe hydrological drought, and an earlier and longer fire season. Using the limited available peat physical properties the importance is demonstrated of initiating a comprehensive programme to build a database of peat physical properties covering different environmental conditions in which tropical peatlands occur. Availability of such a database connected to a long-term monitoring programme, will support the ongoing rewetting, revegetation and revitalisation programme for Indonesian peatlands, which eventually will contribute to sustainable livelihoods for local people and reduce impact on the regional climate.