The influences of biological and physical factors on dissolved oxygen (DO) dynamics are examined for an estuarine ecosystem near Calvert Cliffs, Chesapeake Bay. In several areas of the Chesapeake Bay community photosynthesis (P) and respiration (R) were estimated by observing time-course changes in DO in the open water and in bottles and benthic chambers. In shallow waters (3 m depth) diel changes of DO appeared to be generally dominated by biological metabolism, as has been observed in many other aquatic environments; however, unusual patterns of DO over 24-h periods at deeper stations (10 m) suggested strong influences of physical processes. Diel oxygen budgets were developed for the 10 m stations to investigate possible reasons for these anomalous DO patterns. These DO balances were constructed using explicit measurements for diffusion, Da (across the air/water interface) and Dz (in the vertical plane of the water column), as well as for P and R. Horizontal net dispersion (Hn) was then calculated by difference. In general, biological and physical process each contributed about half to the total oxygen flux at the deeper stations. On the basis of four budgets, mean values of P contributed about 50% of the total inputs to DO stocks, while R accounted for about 43% of the outflows. Gas transfer with the atmosphere, Da, represented only about 8% of the inputs and 3% of the outputs, and Dz accounted for about 5% of both inputs and outputs. Horizontal dispersion, Hn, contributed the remainder, about 40–50% of DO flux in either direction. Measurements of P and R in closed systems (bottles and chambers) differed from measurements in the open water on 11 of 16 occasions by a factor of about 1.5–4. Evidence is provided to suggest that the open-water estimates are more realistic, and that the difference may be due to artificial decoupling of the experimental systems from major pathways of nutrient flux. Some tentative generalizations are also provided concerning which aquatic environments are likely to be amenable to use of open-water techniques.