AbstractTidewater glaciers are highly vulnerable to climate change due to warming from both atmospheric and seawater sources. Most tidewater glaciers are rapidly retreating, but little is known about how glacial melting modifies coastal biogeochemical cycles. Here, we investigate carbonate and nutrient dynamics and fluxes in an expanding proglacial tidal lagoon connected to Europe's largest glacier in Iceland (Vatnajökull). The lagoon N:P:Si ratios (2:1:30) imply a system deficient in nitrogen. The large variations in the freshwater endmembers highlighted the complexity of resolving sources and transformations. The lagoon acted as a sink of dissolved inorganic carbon (DIC). Floating chamber incubations revealed a CO2 uptake of 26 ± 15 mmol m−2 d−1. Lagoon waters near the glacier had a 170% higher CO2 uptake than near the lagoon mouth, likely driven by primary production stimulated by nitrogen‐rich bottom water upwelling. The lateral DIC and total alkalinity (TA) flux rates (outwelling) from the lagoon to the ocean were −1.5 ± 0.1 (export to ocean) and 23 ± 5 mmol m−2 d−1 (import into the lagoon) respectively. All samples were undersaturated with respect to aragonite due to glacial meltwater dilution of TA and CO2 uptake. This implies dilution of oceanic alkalinity, lowering the nearshore buffering capacity against ocean acidification.