Peatlands play an important role in the global carbon cycle and potentially have a significant impact on regional climate change. Restoring and rewetting the degraded peatlands is an urgent task. However, effects of rewetting on the carbon emissions of peatlands remain poorly understood. In this study, the process of rewetting a piece of the degraded Zoige alpine peatland was experimentally simulated and the derived results were compared with those of natural rewetting by monitoring CO2 and CH4 fluxes and other environmental factors before and after rewetting. The natural rewetting results showed that rewetting decreased ecosystem respiration (ER) by about 60%. Furthermore, rewetting increased CH4 emissions by 127%, decreased total carbon emissions (TCE) from 270 to 157 mg CO2 m−2 h−1, and decreased TCE from the entire ecosystem by 42%. The results of the controlled experiment showed that ER decreased gradually as the degree of rewetting was increased, and CH4 fluxes and changes in water level were significantly and positively correlated: CH4 fluxes increased from 0.3 (water level −20 cm) to 2.17 mg CH4 m−2 h−1 (water level 20 cm). After rewetting, the TCE of the whole ecosystem were significantly decreased. Regional observations showed that CO2 fluxes were significantly and negatively correlated to the water level; and the corresponding CO2 equivalent was significantly and positively correlated to the water level, while TCE were significantly and negatively correlated to the water level. Our findings indicate that rewetting can decrease carbon emissions and thus contribute in mitigating the adverse effects of climate change in alpine peatland.