Methane (CH4) emissions from northern peatlands are projected to increase due to climate change, primarily because of projected increases in soil temperature. Yet, the rates and temperature responses of the two CH4 emission‐related microbial processes (CH4 production by methanogens and oxidation by methanotrophs) are poorly known. Further, peatland sites within a fen‐bog gradient are known to differ in the variables that regulate these two mechanisms, yet the interaction between peatland type and temperature lacks quantitative understanding. Here, we investigated potential CH4 production and oxidation rates for 14 peatlands in Finland located between c. 60 and 70 °N latitude, representing bogs, poor fens and rich fens. Potentials were measured at three different temperatures (5, 17.5 and 30 °C) using the laboratory incubation method. We linked CH4 production and oxidation patterns to their methanogen and methanotroph abundance, peat properties, and plant functional types. We found that the rich fen‐bog gradient related nutrient availability and methanogen abundance increased the temperature response of CH4 production, with rich fens exhibiting the greatest production potentials. Oxidation potential showed a steeper temperature response than production, which was explained by aerenchymous plant cover, peat water holding capacity, peat nitrogen and sulphate content. The steeper temperature response of oxidation suggests that, at higher temperatures, CH4 oxidation might balance increased CH4 production. Predicting net CH4 fluxes as an outcome of the two mechanisms is complicated due to their different controls and temperature responses. The lack of correlation between field CH4 fluxes and production/oxidation potentials, and the positive correlation with aerenchymous plants points towards the essential role of CH4 transport for emissions. The scenario of drying peatlands under climate change, which is likely to promote Sphagnum‐establishment over brown mosses in many places, will potentially reduce the predicted warming‐related increase in CH4 emissions by shifting rich fens to Sphagnum‐dominated systems.