The Amazon floodplain (várzea) is seasonally affected by water level fluctuations of the Solimões/Amazon River. The drastic environmental changes that occur also include microbiological processes, such as nitrogen (N2) fixation and denitrification. Both processes were measured in the soil by the acetylene reduction assay and the acetylene block method in a várzea forest on Ilha de Marchantaria, Central Amazonia, Brazil. In the surface soil horizon (0–5 cm), N2 fixation was highest during the exposed period (0·04–0·26 nmolN h−1 g−1 dry weight (dw)). In contrast, denitrification varied from 0 to 1·40 nmolN h−1 g−1 dw, with high rates during the submerged and the transition periods. No significant difference between locations with legume trees, with non-legume trees and without trees could be observed. N2 fixation rates of incubations (litter down to 450 cm depth) for samples collected during the exposed period ranged from 0 to 0·11 nmolN h−1 g−1 dw, with highest rates in the surface soil horizon (0–5 cm). Denitrification ranged from 0 to 0·05 nmolN h−1 g−1 dw, with the highest rate at 250–300 cm depth, which was just below the water table. The maximum N2 fixation rate (0·89 nmolN h−1 g−1dw) and denitrification rate (0·09 nmolN h−1 g−1 dw) occurred in the litter layer. On average, at least three times as much N is lost from the surface soil horizon via denitrification than is gained by N2 fixation annually, but the rates are strongly influenced by the flood pulse. Copyright © 2003 John Wiley & Sons, Ltd.