Natural peatlands support rich biological diversity at the genetic, species, ecosystem and landscape levels. However, because the character of this diversity differs from that of other ecosystem types, the value of peatlands for biodiversity has often been overlooked. Fundamentally, this arises because peatland ecosystems direct part of the energy captured by primary production into long-term storage within a peat layer, and thus establish a structural and functional basis for biodiversity maintenance that is not found elsewhere. This article examines the far-reaching implications for the assessment of peatland biodiversity as well as for the drivers, methods and targets of peatland conservation and restoration initiatives. It becomes clear that a robust framework for the management and restoration of peatland biodiversity must be founded in structural-functional ecosystem analysis, and such a framework is developed. The authors draw on a broad base of historical and contemporary literature and experience, including important Russian contributions that have previously had little international exposure.