Lakes are highly relevant players in the global carbon cycle as they can store large amounts of organic carbon (OC) in sediments, thereby removing OC from the actively cycling pool. However, sediment OC can be released to pore water under anoxic conditions and diffuse into the water column. In carbon budgets of lake ecosystems, this potential OC loss pathway from sediments is generally disregarded. Combining field observations and incubation experiments, we quantitatively investigated dissolved OC (DOC) diffusion from sediments into anoxic water of a boreal lake. We observed substantial increases of bottom water DOC (26% in situ, 16% incubation), translating into a DOC flux from the sediment that was comparable to anoxic sediment respiration (3.3 versus 5.1 mmol m−2 d−1). Optical characterization indicated that colored and aromatic DOC was preferentially released. Reactivity assays showed that DOC released from anoxic sediment enhanced water column respiration and flocculation in reoxygenated water. Upon water oxygenation, flocculation was the most important loss pathway removing ~77% of released DOC, but the remaining ~23% was mineralized, constituting a pathway of permanent loss of sediment OC. DOC diffusion from lake sediment during anoxia and subsequent mineralization in oxic water during mixing increases overall OC loss from anoxic sediments by ~15%. This study enlarges our understanding of lake ecosystems by showing that under anoxic conditions significant amounts of DOC can be released from OC stored in sediments and enter the active aquatic carbon cycle again.