The flux of dissolved organic carbon (DOC) from land to sea is an important net transfer within the global carbon cycle. The biogeochemical fate of this terrestrial DOC (tDOC) remains poorly understood and is usually neglected in ocean models. Southeast Asia accounts for around 10% of global tDOC flux, mostly from tropical peatland-draining rivers discharging onto the Sunda Shelf. We developed a new light-driven parameterization of tDOC remineralization that accounts for photochemical, microbial, and interactive photochemical–microbial degradation. Using this, we simulated the transport and remineralization of tDOC through the Sunda Shelf seas using the regional 3D hydrodynamical–biogeochemical models HAMSOM–ECOHAM. Our realistic hindcast simulations for 1958–2022 show that about 50% of riverine tDOC is remineralized before leaving the shelf. This lowers seawater pH across the entire inner Sunda Shelf by an average of 0.005 units (by up to 0.05 units in the Malacca Strait). Correspondingly, seawater pCO2 is raised, increasing CO2 outgassing from the shelf by 3.1 Tg C yr−1 (0.14 mol m−2 yr−1 ) during 2013-2022. Even regional ocean acidification trends increase, because river discharge and tDOC flux increase. Our model reveals large spatial variability with greatest inputs and remineralization of tDOC close to major peatlands, especially off Sumatra and Borneo. The interannual variability in tDOC input and the monsoonal current reversal lead to strong temporal variability in carbonate system parameters in these areas. Our results highlight the importance of representing tDOC in ocean models, and reveal the fate of tropical peatland tDOC.