Unlike many other peat mosses that require highly acidic conditions, S. squarrosum thrives in areas with moderate calcium levels, particularly along stream banks, in fens, and in wet woodlands dominated by Salix (willows) and Betula (birches).

Sphagnum squarrosum was first formally described by Johann Friedrich Crome in 1803,[4] with the type specimen collected from "Schelfwerder in dem Torfmoore" near Schwerin, Germany.

[5] Over time, the species has accumulated numerous synonyms and infraspecific taxa, reflecting its morphological variability across its wide geographical range.

Branch leaves are larger, measuring 1.9–3.3 mm long, with a broadened base that abruptly contracts at the middle to form pronounced 'shoulders' before tapering to a sharply reflexed, acuminate limb.

The antheridial bracts are densely imbricated (overlapping) and often show yellowish or pale brown colouration; they resemble branch leaves but are smaller and have less divergent apices.

In temperate regions, it typically appears more robust and develops fuller growth in shaded habitats, particularly along brook margins and in wet parts of forest floors.

[7] Sphagnum squarrosum is typically recognisable by its robust habit, bright green to yellow-green colouration, and distinctive "bottle brush" appearance created by its strongly squarrose branch leaves.

Its closest relative, S. teres, can appear similar, particularly when S. squarrosum produces weaker growth forms with less pronounced leaf squarrosity.

The species shows some morphological plasticity in response to environmental conditions, with shade forms often developing a paler internal stem cylinder compared to the typically dark brown colouration of plants from more exposed sites.

[6] Unlike many other peat mosses that require highly acidic conditions, S. squarrosum thrives in mineral-rich environments with moderate calcium levels.

This tolerance is supported by laboratory studies showing the species maintains consistent photosynthetic rates across a wide pH range (5.2–7.5).

[11] The species actively shapes its environment through cation exchange, absorbing calcium and releasing protons to gradually alter water chemistry.

[7] It typically inhabits mesotrophic to slightly eutrophic conditions, growing in wet habitats such as river banks, pond edges, fens, and woodland carr dominated by Salix, Betula or Alnus species.

[9] In North America, it is particularly associated with woodlands subject to seasonal flooding, swamps, and stream margins, while in montane regions it can also colonise wet rock ledges.

Here, at about 80°32.5'N at Nordkapp, at the northern extreme of Chermsideøya on Nordaustlandet, it grows from sea level to approximately 300 m (980 ft) elevation, forming low mats or cushions on moist, gently sloping moss-rich tundra and mineral-rich water seepages.

[6] Sphagnum squarrosum is a monoicious species (having both male and female reproductive organs on the same plant) and frequently produces spores throughout its range.

[9] Research on island colonization reveals that S. squarrosum is an effective long-distance disperser, successfully establishing populations as far as 40 km (25 mi) from parent sources.

[17] The species uses an 'air gun' dispersal mechanism, where spores are explosively discharged from the capsule by built-up air pressure (approximately 5 x 105 Pascals) during warm, dry conditions.

[18] Genetic studies of European populations suggest that S. squarrosum likely survived the Last Glacial Maximum in multiple scattered refugia across Europe.

[9] Sphagnum squarrosum appears in late Holocene subfossil records, notably from peat deposits in northwestern Iran dating back approximately 2,000 years.

These subfossil remains were found in the Tuska Tchal peat bog at an elevation of 1,034 m (3,392 ft), where evidence suggests the species was continuously present from around 2,000 years ago through to recent times.

[19] These Iranian subfossil populations may be glacial relicts from the last ice age, when colder conditions allowed the species to expand its range southward.