Denitrification, N-fixation, and dissolved inorganic and organic fluxes of nitrogen (N) and phosphorus (P) were measured in each of the major benthic habitat types of a shallow oligotrophic subtropical coastal system, and N and P budgets were constructed to quantify the importance of each habitat to N and P cycling in the whole ecosystem. The productivity/respiration (p/r) ratio (trophic status) of the habitats was an important control on the rates, direction (uptake, efflux) and composition (dissolved inorganic N (DIN), dissolved organic N (DON), N 2 ) of N fluxes across the sediment-water interface, with an efflux below p/r = 1.5 and an uptake above p/ r = 1.5. The Zostera Seagrass Community was the most important habitat for N loss via net N 2 effluxes (denitrification; 48%). Denitrification rates in seagrass were higher than those previously measured in temperate regions, most likely due to greater availability of NH 4? for coupled nitrification-denitrification. Yabby Shoals (sub-tidal shoals inhabited by burrowing shrimp, Trypaea australiensis) accounted for the second largest loss of N via denitrification, the largest recycling of DIN and dissolved inorganic P (DIP; statistically significant only during the dark in summer) across the sediment-water interface and the second largest uptake of DON (statistically significant only in summer). This study highlighted that shallow subtropical coastal systems have a complex mosaic of benthic habitats and that some less 'iconic' habitats (i.e. non-seagrass) also make an important functional contribution that controls the flow of N and P through the whole ecosystem.