Denitrification plays a dominant role in the removal of reactive inorganic nitrogen species in different ecosystems. In this study, we investigated the activity, abundance, and community composition of nirS-encoding denitrifying bacteria from sediments of Jiaozhou Bay (JZB). The rates of denitrification, measured by 15N amendment and incubation experiments, varied from 0.18 to 9.97 nmol N g−1 h−1 and contributed to 81.45–99.93% of the total N2 production, while the estimated flux of nitrogen removal was about 5.66 × 104 t N y−1 in surface sediments. Additionally, the abundance of nirS gene ranged from 5.20 × 105 to 3.01 × 108 copies per gram. High-throughput sequencing technique was used to target the nirS gene, which revealed 19 dominant OTUs at 93% similarity that were assigned to 7 clusters. Cluster 2 was mainly affiliated to Thiothrix, while Cluster 4 was mainly affiliated to Woeseia and the other clusters were similar to uncultured denitrifiers obtained from sediments of several coastal estuaries and bays. NH4+ and NO3− contents were identified as the two main factors affecting community composition and distribution of denitrifiers among the surface sediments of JZB. Overall, our results showed that the community of nirS-type denitrifying bacteria had a diverse composition and could highly contribute to nitrogen loss in eutrophic systems.