Microsensors were applied to study the diffusion reaction and activity of a nitrogen species of deposit sediment from a drinking water supply system. Microprofiles of dissolved oxygen (DO), NH4+-N, NO3−-N, and NO2−N in the sediment indicated that the DO concentration decreased from the highest at the sediment surface to zero at the bottom of the sediment. Similarly, with the increase of depth, NH4+-N initially increased rapidly and then decreased slowly, while the concentration of NO3−-N reached a maximum at around 6000 μm and then decreased to about 0.1 mg·L−1 near the bottom of the sediment. Almost no change was observed for NO2−-N. The decrease of NH4+-N and DO corresponded well with the increase of NO3−-N. Furthermore, based on a consumption and production rate analysis, DO has always been consumed; the NH4+-N consumption rate increased rapidly within 0–1000 μm, reaching about 14 mg·L−1·S−1·10−9. A small amount of NH4+-N was produced in 2000–6000 μm, which could be attributed to denitrification activity. There was no change deeper than 6000 μm, while NO3−-N was produced at a depth between 0 and 6000 μm and was consumed in the deeper zone. At the depth of 9000 μm, the NO3−-N consumption reached a maximum of 5 mg·L−1·S−1·10−9. The consumption of DO and NH4+-N, which corresponded with the production of NO3−-N in a specific microscale range within the sediment, demonstrated nitrification and denitrification activities. In addition, the time required for the diffusion of only DO, NH4+-N, NO3−-N, and NO2−-N was estimated as 14 days; however, in the practical, even after 60 days of operation, there was still a continuous reaction, which provided further evidence towards microbial activities within the sediment.