Northern peatlands have been a persistent net sink of atmospheric carbon (C) due to the greater rates of gross primary production (GPP) compared to ecosystem respiration (ER). Global warming has raised concerns about the C sink strength of northern environments. In the vast peatlands of the Hudson Bay Lowlands (HBL) region of Canada, warming-induced changes in sea ice dynamics over the Bay have altered its advective influence on the adjacent lowlands. Despite our knowledge of the short-term C exchange in these peatlands, there remain uncertainties in the long-term combined response of GPP and ER to climate change. In this study, the satellite-data-driven Vegetation Photosynthesis and Respiration Model was employed to investigate the response of peatland GPP, ER, and net ecosystem exchange to temperature and moisture changes. The results show contrasting net CO2 exchange at the two peatland sites over the last 20 years, with the fen acting as a net C source (+24 g C m-2) to the atmosphere and the bog serving as a net C sink (-130 g C m-2). There is ample evidence that a warmer and wetter climate enhanced GPP more than ER, while cooler temperatures weakened the peatland net C sink, regardless of the moisture conditions. Additionally, the advective influence of Hudson Bay on the lowlands produced markedly different C dynamics between offshore and onshore winds, with higher respiration rates (12%-26%) during offshore winds. We discuss the implications for peatland C balance under more frequent onshore winds in the region. Peatlands in northern environments play a vital role in the climate system by storing large amounts of carbon and helping to mitigate climate change. Understanding how peatlands respond to climatic changes is essential for accurate climate projections and informing climate policy decisions. In the vast peatlands of the HBL region of Canada, global warming and changes in sea ice over the Bay have affected the surrounding lowlands. We used satellite data to study how temperature and moisture changes impact carbon exchange in these peatlands. Over the past 20 years, we found that one peatland site released carbon into the atmosphere while another absorbed carbon. Warmer and wetter conditions increased plants' carbon uptake more than carbon release by respiration. In contrast, cooler temperatures weakened the peatland's ability to store carbon, regardless of soil moisture levels. The Hudson Bay's influence on the lowlands led to different carbon dynamics depending on wind direction, with higher respiration rates during offshore (land) winds than winds blowing from the Bay. Our findings have implications for understanding carbon balance in peatlands under changing climate conditions, especially considering the potential for more frequent onshore winds in the region. Fen and bog sites in the Hudson Bay Lowlands (HBL) showed contrasting net CO2 exchange over the last 20 years Peatland carbon exchange varies with climate anomalies, with warmer and wetter conditions increasing photosynthesis more than respiration Higher frequency of onshore winds may strengthen CO2 uptake in the HBL due to the advective influence of the adjacent Bay