Estuarine systems, being situated at the interface between land and marine environments, are important sites for nitrate (NO₃^–) retention and processing due to large inputs, long retention time, and high biogeochemical activity. However, it remains uncertain how pelagic and benthic processes control NO₃^– cycling and how these differ between contrasting seasons. In this study, we measured pelagic and benthic assimilatory and dissimilatory NO₃^– processes in a large lagoon (Curonian Lagoon, SE Baltic Sea) to understand changes in NO₃^– cycling in relation to variation in riverine inputs and shifts in phytoplankton community composition. We show that in spring, benthic dissimilatory and assimilatory NO₃^– processes were important, while in summer, pelagic assimilatory processes dominated. During spring, diatom blooms promote greater delivery of nitrogen (N) and labile organic matter to the benthos resulting in greater denitrification in the sediments and a net flux of NO₃^– from the water column to the sediments. In summer, phytoplankton blooms dominated by buoyant cyanobacteria exhibited high rates of assimilatory uptake and greater particulate organic N export to the sea, but low rates of sediment–water exchange. Cyanobacteria blooms were associated with higher absolute rates of NO₃^– uptake, as well as higher mass-specific rates compared to spring. Given the low dissolved inorganic N in summer, high uptake indicates that the pelagic community possessed a nutritional strategy to efficiently utilize multiple N forms. Overall, our findings show that the seasonal succession from diatom to cyanobacteria-dominated communities is associated with a shift from strong benthic-pelagic coupling to predominantly pelagic-based N cycling.