Background and aims <p>Restoration and novel creation of wetlands is crucial as they store and purify water, sequester carbon, and are biodiversity hotspots. However, wetland rehabilitation on agriculturally-used soils typically causes water quality issues, low biodiversity and high methane emissions. To tackle these challenges in a novel, cost-effective way, <i>Azolla filiculoides</i>, a water-fern capable of nitrogen fixation and phosphorus (P) accumulation, could be cultivated after inundation to simultaneously extract nutrients and provide a commercial product.</p> Methods <p>We cultivated <i>A. filiculoides</i> and a polyculture of <i>A. filiculoides</i> and <i>Typha angustifolia</i>, an emergent macrophyte, on two P-rich former agricultural mineral soils in an outdoor mesocosm experiment during two years. We measured nutrient dynamics in soil, water, and biomass, diffusive and ebullitive methane (CH₄) emissions, and nitrous oxide emissions.</p> Results <p>Open water controls showed substantial P mobilisation to the surface water and were dominated by microalgae or emergent macrophytes. <i>Azolla</i> cultivation lowered surface water P concentrations, but did not negate them in the most P rich soil. Infestation with the Azolla weevil (<i>Stenopelmus rufinasus</i>) severely constrained <i>Azolla</i> growth. Thus, P extraction rates were moderate: up to 38 kg ha⁻¹ yr⁻¹ in the <i>Azolla</i> monoculture, and 67 kg ha⁻¹ yr⁻¹ in the polyculture with <i>T. angustifolia</i>. Methane emissions were substantial and ebullition-dominated in all treatments, and not affected by <i>Azolla</i> cultivation.</p> Conclusion <p><i>Azolla</i> cultivation shows potential in the transition from agriculture to wet nature, while recovering P from former agricultural soils. Remaining challenges include pest control, product development, and technologies for large-scale implementation.</p>