Nitrogen loads in coastal areas have increased dramatically with detrimental consequences for coastal ecosystems. Shallow sediments and seagrass meadows are hotspots for denitrification, favoring N loss. However, atmospheric dinitrogen (N 2 ) fixation has been reported to support seagrass growth. Therefore, the role of coastal marine systems dominated by seagrasses in the net N 2 flux remains unclear. Here, we measured denitrification, anaerobic ammonium oxidation (anammox), and N 2 fixation in tropical seagrass (Enhalus acoroides) meadow and the adjacent bare sediment in a coastal lagoon in the central Red Sea. We detected high annual mean rates of denitrification (34.9 ± 10.3 and 31.6 ± 8.9 mg N m −2 d −1 ) and anammox (12.4 ± 3.4 and 19.8 ± 4.4 mg N m −2 d −1 ) in vegetated and bare sediments. The annual mean N loss was higher (8 and 63-fold higher) than the N 2 fixed (annual mean = 5.9 ± 0.2 and 0.8 ± 0.3 mg N m −2 d −1 ) in the meadow and bare sediment, leading to a net flux of N 2 from sediments to the atmosphere. Despite the importance of this coastal lagoon in removing N from the system, N 2 fixation can contribute substantially to seagrass growth since N 2 fixation rates found here could contribute up to 36 % of plant N requirements. In vegetated sediments, anammox rates decreased with increasing organic matter (OM) content, while N 2 fixation increased with OM content. Denitrification and anammox increased linearly with temperature, while N 2 fixation showed a maximum at intermediate temperatures. Therefore, the forecasted warming could further increase the N 2 flux from sediments to the atmosphere, potentially impacting seagrass productivity and their capacity to mitigate climate change but also enhancing their potential N removal.