Anthropogenically driven alterations to coastal sediments and their benthic macroinvertebrate communities impair ecosystem function. However, this paradigm is yet to be tested in ecosystems that typically harbour underdeveloped communities lacking larger bioturbating species. Here, we investigated the effects of sediment condition and macroinvertebrate communities on benthic metabolism, nutrient exchange and denitrification (N2 production), and assessed the relative importance of taxon richness, abundance, biomass and community bioturbation potential in influencing these processes in 2 regions of the highly modified, microtidal Peel-Harvey Estuary in temperate Western Australia. Sediment condition influenced benthic metabolism more than the macroinvertebrate community, whereas the reverse was true for nutrient exchange. Denitrification was driven by sediment condition and the community in the upper and lower estuary, respectively, highlighting the change in controls of this nitrogen-removal process within estuaries. Overall, benthic macroinvertebrates had little to no effect on many ecosystem processes, exhibiting the limited functional role played by these chronically stressed biota in this estuary. There was also no interaction between sediment condition and the community, suggesting a functional decoupling between these 2 ecosystem components. Where significant macroinvertebrate effects were detected, community biomass was the most frequently selected predictor, demonstrating its fundamental role in ecosystem function. This study reveals pressing implications of what might be expected when benthic environments become particularly degraded and the highly limited potential of the resultant benthic macroinvertebrate communities to provide key ecosystem services such as nutrient processing.