Rewetting of drained agricultural peatlands is widely promoted to mitigate greenhouse gas emissions, yet concerns remain that reductive dissolution of Fe(III) (hydr)oxides may mobilize bound phosphorus (P) and increase eutrophication risk. However, P concentrations following rewetting can vary by orders of magnitude among peatlands, and the processes controlling this variation remain unclear. In this study, we investigated the mechanisms controlling P retention in a rewetted fen (Løvenborg, Denmark) using synchrotron-based P K-edge X-ray absorption spectroscopy (XAS) and µ-X-ray fluorescence (µ-XRF), bulk soil chemistry, selective extractions, and porewater analyses. The study site is characterized by near-neutral pH (6.8–7.2), elevated calcium (Ca) concentrations (~ 0.5 mM), and substantial pools of ~200 mmol oxalate extractable Fe and Al. Fe(III) reduction reached up to 79% of the oxalate-extractable Fe pool, yet dissolved P remained below detection limits (< 0.1 µM) in all samples, demonstrating a clear decoupling between Fe(III) reduction and P release. Calculated mobilized P greatly exceeded measured porewater P, indicating rapid re-immobilization within the soil matrix. Bulk P K-edge X-ray absorption near-edge structure (XANES) spectra were similar under oxic and anoxic conditions and were dominated by organic and Fe/Al-associated P, with no clear bulk evidence of vivianite or hydroxyapatite. In contrast, µ-XANES data collected from hotspots of P identified using µ-XRF revealed localized domains of Fe- and Al-associated P together with Ca phosphates and vivianite-like Fe(II) phosphate phases that are not observed in bulk spectra. Thermodynamic modeling shows strong supersaturation with respect to vivianite and weaker supersaturation for Ca-P. The results of this study imply that P dynamics in neutral, Ca-rich peat soils are governed by microscale mineralogical heterogeneity that is not captured by bulk analytical techniques, suggesting that conventional Fe-based or bulk redox indicators may overestimate P release following peatland rewetting.