Linking microbial community structure to ecological processes requires understanding of the functional roles among individual populations and the factors that influence their distributions. These structure–function relationships are particularly difficult to disentangle in estuaries, due to highly variable physico-chemical conditions. Yet, examining microbe-mediated turnover of resources in these “bioreactor” ecosystems is critical for understanding estuarine ecology. In this study, a combined metagenomics and metaproteomics approach was used to show that the unequal distribution of microbial populations across the Yaquina Bay estuary led to a habitat-specific taxonomic and functional structure and a clear spatial distribution in microbe-mediated capacities for cycling of carbon and nitrogen. For example, size-fractionation revealed that communities inhabiting suspended particulate material encoded more diverse types of metabolisms (e.g., fermentation and denitrification) than those with a planktonic lifestyle, suggesting that the metabolic reactions can differ between size fractions of the same parcel of an estuarine water column. Similarly, communities inhabiting oligotrophic conditions in the lower estuary were enriched in genes involved in central carbon metabolism (e.g., TCA cycle), while communities in the upper estuary were enriched in genes typical of copiotrophic populations (e.g., cell growth, cell division). Integrating gene and protein data revealed that abundant populations of Flavobacteriales and Rhodobacterales encoded similar genomic functions, yet differed significantly in protein expression, dedicating a large proportion of their respective proteomes to rapid growth and division versus metabolic versatility and resource acquisition. This suggested potentially distinct life-strategies between these two co-occurring lineages and was concomitant with differing patterns of positive evolutionary selection on their encoded genes. Microbial communities and their functions across Yaquina Bay appear to be structured by population-level habitat preferences, resulting in spatially distinct elemental cycling, while within each community, forces such as competitive exclusion and evolutionary selection influence species life-strategies and may help maintain microbial diversity.