Hypoxia reduces the mineralization of organic detritus and increases mortality in benthic fauna, both of which alter carbon storage through complex changes in organic matter and calcium carbonate (CaCO₃) dynamics. To mechanistically assess these processes, we developed a new model that links oxic, suboxic, and anoxic mineralization pathways to microbial ATP production efficiency. This formulation was incorporated into the benthic–pelagic coupled model EMAGIN-B.C., resulting in an extended version designated EMAGIN-B.C.-MR (MR: mineralization rate). The model also includes revised mortality and metabolic suppression functions for benthic fauna under oxygen-deficient conditions and explicitly couples suspension-feeding benthos biomass with CaCO₃ production and burial fluxes. We applied EMAGIN-B.C.-MR to Tokyo Bay, a eutrophic coastal system prone to seasonal hypoxia, to simulate long-term changes in carbon cycling under hypoxic (0 mg L⁻¹) and non-hypoxic (5 mg L⁻¹) summer conditions. Results showed that hypoxia enhanced detritus storage and burial by both suppressing microbial degradation and reducing bioturbation and grazing due to suspension-feeding benthos mortality. Conversely, CaCO₃ production and burial declined owing to inhibited shell formation. These dynamics revealed that total carbon storage is shaped by interacting biogeochemical and ecological feedbacks, resulting in nonlinear trajectories under repeated hypoxic stress over decadal timescales. By integrating microbial energetics and oxygen-sensitive faunal responses, the EMAGIN-B.C.-MR model provides a mechanistic framework for assessing benthic carbon cycling under deoxygenation. This framework offers biogeochemical insights into the regulation of organic and inorganic carbon burial balance by oxygen availability – with implications for coastal carbon budgets, blue carbon management, and climate feedbacks – and is applicable to other oxygen-deficient environments such as eutrophic estuaries and semi-enclosed seas.