Peatlands store vast amounts of carbon (C) within the global terrestrial biosphere. Drainage and cultivation of peat soils lead to rapid soil degradation and C losses, and this may worsen under warming as the soils are no longer protected by anaerobic conditions. To predict the rates of soil C loss and design effective mitigation strategies, it is important to understand what controls organic matter mineralization in these soils. Using the 0–10 cm soil depth of thick and thin (degraded) agricultural peat soils, we investigated the fate of low molecular weight organic substrates (LMWOS) and how the microbial biomass consuming these substrates responded to temperature. We incubated the soils under increasing temperatures (4, 10, 20, and 30 °C) for 72 h. Either 14C-labelled glucose or amino acids were added to the soils and their speed of breakdown, partitioning into anabolic/catabolic processes and microbial C use efficiency (CUE) were determined. The total 14CO2 loss from soil increased significantly with increasing temperature during 72-h incubation, regardless of peat layer thickness. Warming altered the dynamics of LMWOS mineralization by changing C allocation and the turnover rate of different microbial C pools. The half-life of LMWOS decreased more than 50% when temperature increased from 4 to 30 °C for both substrates. CUE was always higher for thin than thick peat soil and both declined by 0.002–0.005 °C-1 with increasing temperature. Thin peat decreased substrate C allocation into the fast cycling C pool compared to the thick peat, but had no overall effect on pool turnover rate. Our work suggests that climate warming will accelerate C mineralization and soil loss in drained peat soils, with larger effects expected in thick peat soil. This study provides an important initial step in characterizing the response of the microbial utilization of labile C to temperature change and soil degradation in cultivated peatlands.