Peat moss is composed of the partially rotted remains of plants that have died in water-soaked areas known as bogs. When plants die, microorganisms cause them to decompose. In watery environments, such as swamps and bogs, there is not enough oxygen to support those microorganisms and allow the plants to fully decompose. Peat moss is comprised primarily of partly decomposed sphagnum moss that has been harvested from peat moss bogs.
Peat moss is easily available from garden shops, nurseries and big box stores with garden departments in plastic bags containing 2 to 6 cubic feet of peat moss each. It can also be purchased from landscaping companies by the square yard at a lesser per unit cost. The rule of thumb is to use 2 inches of peat moss to every 6 to 8 inches of topsoil. If you are adding peat moss to garden beds, you would probably want to buy it by the bag, but if you are landscaping an entire lawn, you would be better off buying it by the cubic yard and having it delivered by truck.
Work in an area of about 6 feet by 6 feet. Use a spade or garden fork to loosen and break up the top 6 to 8 inches of the topsoil. Place 2 inches of peat moss over the entire area and work it into the soil using a hoe, spade or fork. You want the peat moss to be well distributed in topsoil you have loosened. You can also do this job with a tiller, which you might want to rent instead of purchasing.
Peat moss can absorb and store 20 times its weight in water. Adding it to topsoil improves the ability of the topsoil to retain moisture, keeping plants' roots evenly wet over a long period of time. While peat moss does not contain many nutrients itself, it does absorb and hold nutrients that are already in the soil either naturally or from fertilizers or compost, meaning that plants can use those nutrients rather than having them leached away. Peat moss also improves soil structure, making the soil lighter and adding more lacunae that serve to store water and air for the roots of the plants.