The 115-ha boreal Wallace Lake watershed, located on Isle Royale in the Lake Superior Basin, receives moderate anthropogenic atmospheric N inputs (3 kg ha-1 yr-1). Ecosystem response to atmospheric N inputs is, in part, determined by internal production and consumption of this limiting nutrient. The objectives of this 2-yr study on plots dominated by birch, spruce, or alder were to quantify forest floor and surface soil net and gross N mineralization rates, and examine potential effects of changes in temperature and moisture on these processes. Gross N mineralization rates were 23 times net mineralization rates, and increased with forest floor/soil temperature and moisture. Substrate quality was a likely factor in higher gross mineralization rates beneath birch and spruce. Ammonium immobilization increased with forest floor/soil temperature and moisture. Higher net N mineralization rates beneath alder resulted from lower microbial immobilization rather than greater gross N mineralization. The greatest differences between gross N mineralization and immobilization occurred in early summer. Ammonium immobilization averaged 62% of gross N mineralization. Net and gross nitrification rates differed by vegetation type, were highest in spring and fall, and increased with moisture. Gross nitrification was 19 times net nitrification rates. Nitrate immobilization increased with soil moisture, and equalled or exceeded gross nitrification. Net and gross N mineralization or nitrification rates were not correlated. Seasonal variation in forest floor and surface soil N cycling coupled with high ecosystem retention of precipitation N inputs suggest streamwater N concentrations and output reflect trends in soil processes.