Phenolic substances, as important carbon decomposition inhibitors in peatlands, and vegetation, as a key carbon input source in peatlands, play an important role in soil carbon (Dissolved organic carbon (DOC)) cycle. However, the response of vegetation community structure, phenolic substances and DOC content to water level fluctuations has been controversial. Therefore, in order to elucidate the effects of water table drawdown on vegetation community structure, phenolic substances and DOC content, and explore the potential relationship among them in peatland. Taking the Zoige Plateau peatland as the research object, three peatlands with different groundwater levels in Riganqiao of Hongyuan County were selected (The order of water table from high to low: S1 (-1.9 cm), S2 (-10 cm), S3 (-19 cm) sample plot). To explore the characteristics of vegetation community structure under different water tables and to explore the response of phenolic substances and soil carbon content to water table fluctuations. The results showed that: (1) The decrease of water table from S1 to S3 promoted the soil DOC to increase significantly (P < 0.05), and soil total carbon was significantly increased from S1 to S2 (P < 0.05), but had no significant difference from S2 to S3.; (2) The decrease of water table in peatland has led to the emergence of large amounts of Gramineae (Deschampsia cespitosa) and Cyperaceae (Carex muliensis and Carex meyeriana), and the height of vegetation community was significantly increased (P < 0.05). Aboveground biomass increased from 153.67 g/m² to 649.22 g/m² (P < 0.05), and underground biomass increased from 1067.52 g/m² to 3424.78 g/m² (P < 0.05). Total phenols in aboveground and underground parts of plants increased by 34.58% and 13.17%, respectively (P < 0.05). And this may promoted more plant carbon to enter the soil system. (3) With the decrease of water table, soil total phenols, water-soluble phenols and polyphenols increased by 29.06%, 542.87% and 110.56%, respectively (P < 0.05). The content of monophenol first increased and then decreased, but the overall content still showed an increasing trend, and the change of diphenol content was not obvious; (4) Structural equation model analysis shows that monophenol and polyphenols can significantly promote DOC and total carbon accumulation (P < 0.05), while diphenol had no significant effects on soil DOC and total carbon accumulation. Previous studies have shown that falling water table accelerate carbon losses, but this study found that this loss appears to be offset by the effects of plants and phenolic acids. Therefore, the study of carbon cycle in peatland should focus on the whole soil-plant system and consider the effect of phenolic substances in soil.