Laboratory mesocosm incubations were undertaken to investigate the influence of natural densities of the thalassinidean shrimp, Trypaea australiensis (marine yabby) on sediment oxygen demand (SOD), inorganic nutrient fluxes, and the N-cycle processes of nitrification, denitrification and dissimilatory nitrate reduction to ammonium (DNRA). Mesocosms (~ 0.1 m 2 × 55 cm deep) of sieved, natural T. australiensis inhabited sands were continually flushed with fresh seawater and pre-incubated for two weeks prior to being assigned to one of three treatments; control (no additions), low yabby density (40 T. australiensis m − 2 ) or high yabby density (80 T. australiensis m − 2 ). Thereafter, SOD and sediment–water column inorganic nutrient fluxes were determined periodically over a 38 day period. On the final day rates of denitrification and dissimilatory nitrate reduction to ammonium (DNRA) were also determined using the 15N-isotope pairing technique. Yabbies consistently and significantly ( p < 0.001) stimulated SOD over the entire 38 day incubation period (mean values: 4.92, 9.21 and 14.9 mmol m − 2 day − 1 for control, low and high density treatments, respectively). The increased organic matter mineralisation rates greatly enhanced nitrogen regeneration rates in the sediment and fuelled significantly higher effluxes of dissolved inorganic nitrogen with NH 4 + and total DIN effluxes in the low and high density treatments respectively, being 617 and 1534%, and 269 and 565% higher than those in the controls, despite sediment bioavailable (porewater + exchangeable) NH 4 + pools being approximately 2 and 4-fold lower in the low and high density yabby treatment sediments compared to the controls, measured at the end of the 37 day experiment. Mass balance calculations based on the final day nutrient flux and nitrate reduction rate data demonstrated that yabbies stimulated benthic nitrification rates by 31 and 46% in the low and high density treatments. However, somewhat surprisingly T. australiensis population density had no effect on rates of denitrification and DNRA despite the higher rates of nitrification and higher equilibrium water column nitrate concentration. Indeed, nitrate reduction processes became an increasingly unimportant element with increasing yabby density with for example, N 2 generated by coupled nitrification–denitrification representing 11.5, 5.2 and 2.8% of the total inorganic-N recycled to the water column in the control, low density and high density yabby treatments, respectively. Overall, the major influence of T. australiensis in the studied low organic matter content, sandy sediments was to enhance coupling between the benthic and pelagic systems through increased rates of inorganic nitrogen regeneration in the sediment and enhanced export of this nitrogen to the water column. Our results also suggest that the influences of organisms such as T. australiensis which form deep, extensive and complex burrow systems where irrigation rates differ greatly between different burrow sections, may be more complex than those recorded for infauna which form simple U-shaped burrows. Additionally, there may be a strong interaction between faunal effects and the sediment physical and biological environment and thus the same species may have contrasting influences in different sediment types.