Charophyte stands represent valuable ecosystems threatened by eutrophication-related phytoplankton and epiphyte blooms. The mechanisms allowing the persistence of charophytes in eutrophic environments are important but poorly studied. We analyzed the benthic primary production and respiration, and inorganic nitrogen (N) fluxes in a Chara contraria stand within a eutrophic estuarine system (Curonian Lagoon) via light and dark intact core incubations. Rates were contrasted with those measured in adjacent unvegetated sediments. Additionally, O2 production was measured in fragments of C. contraria and in the associated community of epiphytes, whereas O2 respiration and ammonium (NH4+) excretion rates were measured in incubation of amphipods (Pontogammarus robustoides) alone. The results from core incubations suggest high primary production and respiration within charophyte stands, resulting in pronounced daily O2 variations in the overlaying water. The incubations of charophyte fragments and associated epiphytes indicate that the latter supports a major fraction of the benthic primary production. The large production of dinitrogen in the dark indicates the occurrence of denitrification, which is suppressed in the light due to primary producers-bacteria competition. On a daily basis, the charophyte stand was a sink for inorganic N via assimilative NH4+ uptake and a dark nitrate sink via denitrification. Interestingly, active NH4+ excretion by the abundant amphipods supported nearly 40 % of the N uptake by the primary producers. We speculate that amphipods continuously feed on epiphytes growing on charophytes, favouring C. contraria persistence and recycling large amounts of N via herbivory and excretion that are immediately re-used by benthic primary producers. This grazing, excretion and assimilation loop may represent an example of macrofauna-macrophyte mutual facilitation and a mechanism easing C. contraria competition under eutrophic conditions.