The main purpose of this study was to estimate the role of dissolved inorganic nitrogen (DIN) released from sediment and denitrification process in sediment on the nitrogen budget of Hiroshima Bay by means of collecting data on distributions and budgets of nitrogen and phosphorus in the bay, DIN fluxes across sediment-water interface and denitrification rates in the sediments of the same area. The TN : TP and DIN:DIP atomic ratios of the discharged freshwater were about 26 and 21, respectively. The standing stocks in the seawater of the TN : TP atomic ratio varied from 8 to 14 with an annual mean value of 11, while the DIN : DIP atomic ratio varied from 10 to 15 with an annual mean value of 12 in the bay. The residence time of nitrogen and phosphorus were estimated to be about 109 days and 200 days in the bay, respectively. The proportion of DIN released from sediment and denitrification rate to the loading of total nitrogen into Hiroshima Bay were $45\%;(37~82\%);and;13\%(0.0~37\%)$, respectively, and the amount of nitrogen through denitrification process was 6.5 times larger than the outflow of nitrogen from the bay. The results show that DIN released from sediment and denitrification process in sediment play important roles on the nitrogen budget in Hiroshima Bay.