Removal of fixed nitrogen in the water column of the eastern Gotland Basin, central Baltic Sea, was studied during two cruises in September 2008 and August 2010. The water column was stratified with anoxic sulfidic bottom water meeting oxic nitrate containing water at the oxic–anoxic interface. Anammox was never detected whereas denitrification was found in all incubations from anoxic depths and occurred immediately below the oxic–anoxic interface. Sulfide (H2S + HS− + S2−) was in most cases the only electron donor for denitrification but, in contrast to previous findings, denitrification was in some situations driven by organic matter alone. Nitrous oxide (N2O) became an increasingly important product of denitrification with increasing sulfide concentration and was >80% of the total N gas formation at 10 μM sulfide. The potential rates of denitrification measured in incubations at elevated View the MathML source or sulfide concentrations were converted to in situ rates using the measured water column concentrations of View the MathML source and sulfide and the actual measured relations between View the MathML source and sulfide concentrations and denitrification rates. In situ denitrification ranged from 0.24 to 15.9 nM N2 h −1. Assuming that these rates were valid throughout the anoxic View the MathML source containing zone, depth integrated in situ denitrification rates of 0.06–2.11 mmol N m−2 d−1 were estimated. The thickness of this zone was generally 3–6 m, which is probably what can be maintained through regular turbulent mixing induced by internal waves at the oxic–anoxic interface. However, layers of up to 55 m thickness with low O2 water (<10 μM) were observed which was probably the result of larger scale mixing. In such a layer nitrification may produce View the MathML source and once the O2 has been depleted denitrification will follow resulting in enormous rates per unit area. Even with an active denitrification layer of 3 –6 m thickness the pelagic denitrification per unit area clearly exceeded sediment denitrification rates elsewhere in the Baltic Sea. When extrapolated to the entire Baltic Proper (BP) denitrification in the water column was in the range of 132–547 kton N yr−1 and was thus at least as important as sediment denitrification which has recently been estimated to 191 kton N yr−1. With a total external N-input of 773 kton N yr−1 it is clear that denitrification plays a significant role in the N-budget of the BP.