We analysed the spatial and temporal variability of benthic nitrogen fluxes and denitrification rates in a sub-alpine meromictic lake (Lake Idro, Italy), and compared in-lake nitrogen retention and loss with the net anthropogenic nitrogen inputs to the watershed. We hypothesized a low nitrogen retention and denitrification capacity due to meromixis. This results from nitrate supply from the epilimnion slowing down during stratification and oxygen deficiency inhibiting nitrification and promoting ammonium recycling and its accumulation. We also hypothesized a steep vertical gradient of sedimentary denitrification capacity, decreasing with depth and oxygen deficiency. These are important and understudied issues in inland waters, as climate change and direct anthropic pressures may increase the extent of meromixis. Nearshore sediments had high denitrification rates (87 mg m−2 day−1) and efficiency (~ 100%), while in the monimolimnion denitrification was negligible. The littoral zone, covering 10% of the lake surface, contributed ~50% of total denitrification, while the monimolimnion, which covered 70% of the sediment surface, contributed to < 13% of total denitrification. The persistent and expanding meromixis of Lake Idro is expected to further decrease its nitrogen removal capacity (31% of the incoming nitrogen load) compared to what has been measured in other temperate lakes. Values up to 60% are generally reported for other such lakes. Results of this study are relevant as the combination of anthropogenic pressures, climate change and meromixis may threaten the nitrogen processing capacity of lakes.