Tropical peatlands of Southeast Asia are generally ombrogenous, dome-shaped landforms on interfluves that exist under constantly high temperatures. Their carbon balance is consequently highly sensitive to changes in moisture supply and severe moisture deficits may lead to catastrophic shifts in the carbon pools of these peatlands. During the Late Holocene, non-linear-threshold responses seem to have occurred in inland peatlands of southern Borneo where numerous truncated peat profiles were found. These truncated profiles show high carbon accumulation rates of ~60 g m-2 yr-1 for the Early to Mid Holocene and near surface ages of between 7000 and 4000 yr BP. We propose that lowered sea-levels and reduced June to November precipitation after 4000 yr BP lowered the potential water table mound of interfluvial peat domes, making them extremely sensitive to droughts. An abrupt increase in frequency and intensity of El Niño events after 2000 yr BP ultimately switched the peat domes into carbon dioxide releasing ecosystems that have progressively lost surface peat ever since. We examined this highly responsive behavior from both a paleoecological and a modelling perspective. To improve the near surface age estimates new AMS-14C dates were added to two of the profiles. The influence of lowered sea-levels and precipitation recharge on the elevation of the water-table mounds of the interfluvial peat domes was simulated with the Dupuit equation for groundwater table topography. The influence of changes in moisture supply and lowered base-level on annual peat growth was explored with the Holocene Peat Model (HPM). The HPM model results show that, with an imposed gradual drying that increased decomposition rates, the contemporary peat depth is less than at 4000 yr BP (annual net C release) and apparent accumulation rates dropped from ~0.5 mm yr-1 to ~0.1 mm yr-1. Assuming peat loss started 2000 yr BP, annual carbon release from degrading peat domes is between ~60 to ~110 g C m-2 yr-1 and is similar to results from ongoing eddy-covariance CO2 flux measurements in one of the degrading peat domes. A GIS representation of peat degradation in southern Borneo allowed us to upscale regional carbon losses for the past 2000 years. These losses range from ca. 0.25 to 0.5 Tg C yr-1. Our results help to constrain predictions of the future response of tropical peatlands to global warming and possible changes in the El Niño-Southern Oscillation.