1. Vascular plant growth forms in northern peatlands differ in their strategies to cope with the harsh climate, low nutrient availability and progressively increasing height of the Sphagnum carpet in which they grow. Climate change may therefore affect growth forms differentially, both directly and through changes in the length growth of Sphagnum mosses. However, the role of mosses as modifiers of climate-change effects on vascular plants has been largely overlooked so far. We investigated the direct and Sphagnum-mediated effects of experimental changes in summer, winter and spring climate on four species of contrasting growth forms (evergreen and deciduous shrubs, graminoid, forb) in a subarctic bog, by studying their biomass and nitrogen losses through leaf litter, and the length growth of the two shrubs. 2. Direct and indirect effects of summer warming differed among the growth forms. Enhanced Sphagnum overgrowth of leaves due to summer warming initially stimulated leaf litter losses of the evergreen shrub Empetrum nigrum. However, changes in its shoot morphology, related to an apparent small increase in its length growth, prevented further effects. A stronger increase in stem growth of the deciduous shrub Betula nana in response to summer warming directly reduced its leaf litter mass, N concentration and N losses. The changed allocation prevented indirect, Sphagnum-mediated effects on its leaf and N dynamics through overgrowth of buds. In contrast, leaf litter mass, N concentrations or N losses of the forb Rubus chamaemorus and the graminoid Calamagrostis lapponica were not affected by summer warming or enhanced Sphagnum growth. 3. Increases in winter snow cover, with or without spring warming, did not affect shrub growth, nor the total shoot leaf litter mass or N dynamics of any of the growth forms. 4. Altogether, summer warming is likely to enhance Sphagnum overgrowth of small shrubs with a limited growth response such as Empetrum. Moreover, increased vertical growth may allow Sphagnum to keep pace with inclined growing, responsive shrubs such as Betula. This might prevent net longer-term positive effects of summer warming on the vascular plant canopy height. However, leaf litter and N losses are more likely to be affected by direct warming effects on shoot morphology and allocation than by Sphagnum growth. The different responses of the growth forms to summer warming suggest that both direct and Sphagnum-mediated climate effects have the potential to change the vascular plant community and N dynamics in peatlands. © 2006 British Ecological Society.