Abstract. Net ecosystem carbon exchange (NEE) was measured with eddy covariance method for two adjacent forests located at the southern boundary of European taiga in Russia in 1999–2004. The two spruce forests shared similar vegetation composition but differed in soil conditions. The wet spruce forest (WSF) possessed a thick peat layer (60 cm) with a high water table seasonally close to or above the soil surface. The dry spruce forest (DSF) had a relatively thin organic layer (5 cm) with a deep water table (>60 cm). The measured multi-year average NEE fluxes (2000 and –1440 kg C ha⁻¹yr⁻¹ for WSF and DSF, respectively) indicated that WSF was a source while DSF a sink of atmospheric carbon dioxide (CO₂) during the experimental years. A process-based model, Forest-DNDC, was employed in the study to interpret the observations. The modeled multi-year average NEE fluxes were 1800 and –2200 kg C ha⁻¹yr⁻¹ for WSF and DSF, respectively, which were comparable with observations. The modeled data also showed high soil heterotrophic respiration rates at WSF that suggested that the water table fluctuation at WSF could have played a key role in determining the negative carbon balance in the wetland ecosystem. A sensitivity test was conducted by running Forest-DNDC with varied water table scenarios for WSF. The results indicated that the NEE fluxes from WSF were highly sensitive to the water table depth. When the water table was high, the WSF ecosystem maintained as a sink of atmospheric CO₂; while along with the drop of the water table the length of the flooded period reduced and more organic matter in the soil profile suffered from rapid decomposition that gradually converted the ecosystem into a source of atmospheric CO₂. The general effect of water table variation on wetland carbon balance observed from this modeling study could be applicable for a wide range of wetland ecosystems that have accumulated soil organic carbon while face hydrological changes under certain climatic or land-use change scenarios.