Benthic respiration, sediment–water nutrient fluxes, denitrification and dissimilatory nitrate reduction to ammonium (DNRA) were measured in the upper section of the Parker River Estuary from 1993 to 2006. This site experiences large changes in salinity over both short and long time scales. Sediment respiration ranged from 6 to 52 mmol m⁻² day⁻¹ and was largely controlled by temperature. Nutrient fluxes were dominated by ammonium fluxes, which ranged from a small uptake of −0.3 to an efflux of over 8.2 mmol N m⁻² day⁻¹. Ammonium fluxes were most highly correlated with salinity and laboratory experiments demonstrated that ammonium fluxes increased when salinity increased. The seasonal pattern of DNRA closely followed salinity. DNRA rates were extremely low in March, less than 0.1 mmol m⁻² day⁻¹, but increased to 2.0 mmol m⁻² day⁻¹ in August. In contrast, denitrification rates were inversely related to salinity, ranging from 1 mmol m⁻² day⁻¹ during the spring and fall to less than 0.2 mmol m⁻² day⁻¹ in late summer. Salinity appears to exert a major control on the nitrogen cycle at this site, and partially decouples sediment ammonium fluxes from organic matter decomposition.