We tested the extent to which horizontal hydraulic conductivity (Kh) below the water table in near-surface peats is affected by the accumulation of biogenic gas bubbles. We found: (1) Immediately after water table rise the peat is not saturated. Levels of initial undersaturation were between 1 and 9 percent. (2) The production of biogenic gas bubbles below the water table causes large reductions (typically more than a factor of two) in Kh.