Coastal cities in tropical areas are often low-lying and vulnerable to the effects of flooding and storms. San Juan, Puerto Rico is a good example of this. It is built around a lagoon-channel complex called the San Juan Bay Estuary (SJBE). A critical channel in the estuary, the Caño Martín Peña, has filled in and now frequently floods the surrounding communities with sewage-enriched waters, causing a series of human health and ecological problems. Sediment core analyses indicate that portions of the SJBE now function as settling basins. High urban and sewage runoff to the Caño contributes nitrogen (N), but stable isotope and sediment nutrient analyses indicate that this runoff may also enhance conditions for coupled sulfate reduction-nitrogen fixation. The amount of 'new' bioavailable N created from inert atmospheric N2 gas may meet or exceed that from the runoff into the Caño Martín Peña. The ecological consequences of this appear to extend beyond the ponded channel, potentially contributing to the poor water quality of the SJBE, greater than contaminated runoff alone.