The Laoyehai (lagoon) is located at the east coast of Hainan Island in the South China Sea and has been subject to perturbations from human activities, notably marine aquaculture, and has eutrophic surface and hypoxic near-bottom waters. A lack of knowledge of hydrodynamic and biogeochemical processes is a challenge to the sustainable management of lagoon at the ecosystem level in science. Five field campaigns, including three during the southwest monsoon and two in the northeast monsoon periods, were carried out at the Laoyehai in 2008-2011. The aim of this study is to investigate the impacts of dynamic processes of hydrography and human activities on nutrient geochemistry and their relationships to the system eutrophication and hypoxia in the lagoon. In this coastal system, high levels of ammonium relative to nitrate are found, elevated phosphate skews the DIN/DIP relative to the Redfield ratio, and the dissolved silicate concentration is high because of submarine groundwater discharge. The organic fraction in the Laoyehai accounts for a large proportion of the total nutrients associated with the release of wastes from marine aquaculture. The hypoxia of near-bottom waters in the Laoyehai is created and maintained by heterotrophic processes that are fueled by organic matter, which are exacerbated by poor water exchange as a consequence of the geomorphology and weak tidal circulation.