Unique peatland properties, such as their ability to preserve intact ancient human remains (bog bodies) and to store globally significant quantities of atmospheric CO2, can be attributed to their low rates of enzymic decomposition. Peatland soils are normally devoid of molecular oxygen in all, but the uppermost layer, and thus enzymes such as phenol oxidase, which require molecular oxygen for their activity, are rarely active. Interestingly, even the activities of enzymes such as hydrolases that have no oxygen requirement, are also extremely limited in peatlands. Here, we show that those low hydrolase activities can be indirectly attributed to oxygen constraints on phenol oxidase. On addition of oxygen, phenol oxidase activity increased 7-fold, P<0.05, a response that allowed phenolic depletion in the peatland soil. Phenolic materials are highly inhibitory to enzymes and their lower abundance allowed higher hydrolase activities (β-glucosidase 26%, P<0.05, phosphatase 18%, P<0.05, sulphatase 47%, P<0.01, xylosidase 16%, P<0.05 and chitinase 22%, P<0.05). Thus, oxygen constraints upon phenol oxidase activity promote conditions that inhibit decomposition. This mechanism has important implications for preservation of archaeological organic materials, sequestration of atmospheric CO2 and potentially in the preservation of food and treatment of water pollution.