In order to determine the impact of nutrient enrichment on phosphorus (P) limited wetlands, we established experimental P additions in marshes throughout northern Belize. P significantly increased macrophyte primary production, which led to the rapid elimination of cyanobacterial mats. The replacement of cyanobacterial mats by macrophytes constrained autotrophic nitrogen (N) fixation, increased the quantity, and changed the quality of organic matter input to the sediments. We predicted that the activity of sediment heterotrophic N fixers will be impacted by these alterations in carbon input. We used the acetylene reduction technique to measure potential (glucose amended) nitrogenase activity (NA) in sediments from controls and treatment plots that have been P enriched for four years and dominated either by Eleocharis cellulosa, or Typha domingensis for two years. NA in P-enriched plots was 2–3 orders of magnitude higher than NA in controls. NA was positively correlated with the soil reactive P, both total organic and microbial carbon, live root biomass, and total phospholipid fatty acids (PLFA) as an indicator of active microbial biomass. It was negatively correlated with the concentration of ammonium-N. Path analysis revealed that the indirect effect of P on NA through the root biomass was more important than the direct effect of P. NA of the upper sediment layer was consistently higher in Eleocharis than in Typha dominated plots, despite the higher litter input by Typha. We feel that the higher levels of lignin and phenolics occurring in Typha litter, relative to Eleocharis, constrained NA in Typha plots.