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Saltmarshes provide many valuable ecosystem services including storage of a large amount of 'blue carbon' within their soils. To date, up to 50% of the world's saltmarshes have been lost or severely degraded primarily due to a variety of anthropogenic pressures. Previous efforts have aimed to restore saltmarshes and their ecosystem functions, but the success of these efforts is rarely evaluated. To fill this gap, we used a range of metrics, including organic carbon stocks, root production, soil respiration and microbial communities to compare natural and a 20-year restoration effort in saltmarsh habitats within the Sydney Olympic Park in New South Wales, Australia. We addressed four main questions: (1) Have above- and belowground plant biomass recovered to natural levels? (2) Have organic carbon stocks of soils recovered? (3) Are microbial communities similar between natural and regenerated saltmarshes? and (4) Are microbial communities at both habitats associated to ecosystem characteristics? For both soil organic carbon stocks and belowground biomass, we found no significant differences between natural and regenerated habitats (F(1,14) = 0.47, p = 0.5; F(1,42) = 0.08, p = 0.76). Aboveground biomass was higher in the natural habitat compared to the regenerated habitat (F(1,20) = 27.3, p < 0.0001), which may result from a site-specific effect: protection from erosion offered by a fringing mangrove forest in the natural habitat but not the regenerated habitat. Our microbial community assessment indicated that restored and natural saltmarsh habitats were similar at a phylum level, with the exception of a higher proportion of Proteobacteria in the rhizosphere of saltmarshes from the regenerated habitat (p < 0.01). Abundance of both Desulfuromonas and Geobacter was associated with high carbon and nitrogen densities in soils indicating that these genera may be key for the recovery of ecosystem characteristics in saltmarshes. Our restored and natural saltmarsh soils store at 30 cm depth similar levels of organic carbon: 47.9 Mg OC ha−1 to 64.6 Mg OC ha−1. Conservation of urban saltmarshes could be important for 'blue carbon' programmes aimed at mitigating atmospheric carbon dioxide. [ABSTRACT FROM AUTHOR]