Ditch cleaning in drained peatland forests increases sediment loads and degrades water quality in headwater streams and lakes. A better understanding of the processes controlling ditch erosion and sediment transport in such systems is a prerequisite for proper peatland management. In order to relate hydrological observations to key erosion processes in headwater peatlands drained for forestry, a two-year study was conducted in a nested sub-catchment system (treated with ditch cleaning) and at two reference sites. The treated catchment was instrumented for continuous discharge and turbidity monitoring, erosion pin measurements of changes in ditch bed and banks and time-integrated sampling of suspended sediment (SS) composition. The results showed that ditch cleaning clearly increased transient suspended sediment concentrations (SSCs) and suspended sediment yields (SSYs), and resulted in temporary storage of loosely deposited organic sediment in the ditch network. After exhaustion of this sediment storage, subaerial processes and erosion from ditch banks became dominant in producing sediment for transport. Recorded SSCs were higher on the rising limbs of event hydrographs throughout the study period, indicating that SS transport was limited by availability of erosion-prone sediment. A strong positive correlation (R-2=0.84, p<0.001) between rainfall intensity (above a threshold of 1mmh(-1)) and average SSC obtained on the rising limb of hydrographs for the sub-catchment showed that soil detachment from ditch banks by raindrop impact can directly increase SSC in runoff. At the main catchment outlet, variation in SSC was best explained (R-2=0.67, p<0.05) by the linear combination of initial discharge (-), peak discharge (+) and the lag time from initial to peak discharge (-). Based on these factors, ditch cleaning slightly increased peak discharges and decreased transit times in the study catchment. The implications of the results for water pollution management in peatland forests are discussed. Copyright (c) 2016 John Wiley & Sons, Ltd.