Variation in local exchange of flows between the channel and hyporheic zone produced temporally shifting concentration gradients of dissolved oxygen, nitrate, and ammonium in subsurface waters of a small, gravel-cobble bed stream. Channel water advected laterally supplied dissolved oxygen, and groundwater supplied ammonium to support hyporheic nitrification. Nitrate production was highest in sediment slurries from aerobic hyporheic sites, was absent at nearly anoxic sites, and was stopped by nitrification inhibitors (chlorate and nitrapyrin). Ammonium amendment to sediment slurries only slightly enhanced nitrate production indicating that sorption competed with biota for available substrate. Nitrate concentration increased from 75–130 μg N/L during 9 d of ammonium amendment to a hyporheic subsurface flow. Ammonium concentration rose slowly relative to a sulfate tracer initially, and declined slowly after cutoff as ammonium desorbed. Nitrate levels remained elevated for 6 d after cutoff as desorbed ammonium became biotically available. Interactions between the channel's hydrology, lithology, and biology such as we observed in nitrate production are probably more common than reported. However, the magnitude of the resulting nutrient flux will depend on factors which determine the depth and lateral extension of suitable hyporheic habitat.