Worldwide, regularly recurring wildfires shape many peatland ecosystems to the extent that fire‐adapted species often dominate plant communities, suggesting that wildfire is an integral part of peatland ecology rather than an anomaly. The most destructive blazes are smoldering fires that are usually initiated in periods of drought and can combust entire peatland carbon stores. However, peatland wildfires more typically occur as low‐severity surface burns that arise in the dormant season when vegetation is desiccated, and soil moisture is high. In such low‐severity fires, surface layers experience flash heating, but there is little loss of underlying peat to combustion. This study examines the potential importance of such processes in several peatlands that span a gradient from hemiboreal to tropical ecozones and experience a wide range of fire return intervals. We show that low‐severity fires can increase the pool of stable soil carbon by thermally altering the chemistry of soil organic matter (SOM), thereby reducing rates of microbial respiration. Using X‐ray photoelectron spectroscopy and Fourier transform infrared, we demonstrate that low‐severity fires significantly increase the degree of carbon condensation and aromatization of SOM functional groups, particularly on the surface of peat aggregates. Laboratory incubations show lower CO2 emissions from peat subjected to low‐severity fire and predict lower cumulative CO2 emissions from burned peat after 1-3 years. Also, low‐severity fires reduce the temperature sensitivity (Q 10) of peat, indicating that these fires can inhibit microbial access to SOM. The increased stability of thermally altered SOM may allow a greater proportion of organic matter to survive vertical migration into saturated and anaerobic zones of peatlands where environmental conditions physiochemically protect carbon stores from decomposition for thousands of years. Thus, across latitudes, low‐severity fire is an overlooked factor influencing carbon cycling in peatlands, which is relevant to global carbon budgets as climate change alters fire regimes worldwide.