It has a circumboreal distribution, occurring primarily in moist boreal forest environments across Eurasia and North America, with rare occurrences in Arctic tundra regions.

First described in 1860 from Estonia, it typically grows in boggy mineral-rich spruce forests and at the borders of mires, forming small carpets and hummocks.

Sphagnum wulfianum was first described by Gustav Karl Girgensohn in 1860 from specimens collected near Tartu,[4] Estonia (then part of Livland in the Russian Empire).

[5] The lectotype specimen, designated in 2007, was collected by Girgensohn on 21 March 1847, and is housed in the Institute of Agriculture and Environment of the Estonian University of Life Sciences (TAA).

Several syntypes and other original specimens collected by Girgensohn are preserved in various herbaria including Helsinki (H), St. Petersburg (LE), and Tartu (TAM).

[13] The presence of this species in regions at the edge of its range may represent relatively recent colonisation rather than relict populations from glacial periods, as suggested by studies in northeastern Poland showing a lack of fossil remains in peat deposits.

Paleoecological evidence suggests that S. wulfianum in these southern tundra regions may be a relict from the Holocene climatic optimum, when these areas were covered by forest vegetation.

[14] It is fairly common in Finland and eastern middle Sweden, but becomes increasingly rare towards its western and southern range limits in Europe.

[11] Within these forest environments, S. wulfianum grows directly on the ground or over fallen tree trunks, typically forming small isolated cushions.

This genetic uniformity suggests high rates of gene flow across large distances, despite the species' infrequent spore production.

Despite its infrequent spore production, the species appears capable of long-distance dispersal, as evidenced by the widespread distribution of shared genetic types from Norway to Russia.

[11] Sphagnum wulfianum is listed as Least Concern (LC) across Europe and the European Union due to its large geographic range and stable overall population trends.

It is classified as Endangered (EN) in Norway, Romania, and Ukraine, Vulnerable (VU) in Poland and Lithuania, and Near Threatened (NT) in Estonia.