Encerrada Bay (EB) is located in the far south of Argentina, on the north coast of the Beagle Channel and is artificially connected with Ushuaia Bay (UB). This study was carried out between 2004 and 2005; and assesses the impact of Ushuaia city to the nutrient dynamics in EB. It was focused on physical and chemical characterization of discharges, water and sediment quality, nutrient benthic fluxes, and water exchange with UB. The average ammonium, nitrate, phosphate and silicate concentrations in the water bay were 99.5±30.7; 10.0±4.2; 2.0±0.7; 23.5±2.9 µM, respectively. Benthic fluxes showed a consumption of oxygen (50-450 mg m −2 h −1 ) and nitrate (20-416 µmol m −2 h −1 ) by sediment and release of ammonium (79−4,772 µmol m −2 h −1 ) and phosphate (27-36 µmol m −2 h −1 ) into the water column. The daily contributions of nitrogen and phosphate from the effluents to EB were between 102 and 517 kg day −1 and between 4 and 22 kg day −1 respectively, while the net average export fluxes to UB were 41.7 kg day −1 of nitrogen and 15.7 kg day −1 of phosphate. The difference between received and exported nutrients is consumed in EB by primary producers, partially buffering the impact of wastewater in UB at its own eutrophication risk.