Despite dramatic increases in nitrogen (N) loading to fresh waters and growing scientific attention on the changing N cycle, measurements of nitrification and denitrification rates in lakes are lacking. In particular, we know little about how these processes vary spatially within a lake, and how this potential spatial variation contributes to a lake's N dynamics. We measured sediment nitrification and denitrification rates at 40 sites in Gull Lake, Michigan (USA), and found that the shallow edge sediments (<2 m deep) of the lake were hot spots of N transformation. Nitrification rates were comparable in sediments at all depths, while sediment denitrification rates were highest in the shallow edge habitat, and lowest in the profundal sediments (<2 m and >10 m deep, respectively). We scaled-up our sediment transformation rates across the lake to illustrate spatial variability in nitrification and denitrification. For whole-lake nitrification, the contribution of shallow edge, littoral, and profundal sediments followed in proportion to lake surface area of each habitat. In contrast, the contribution of each of these areas to whole-lake denitrification was not proportional to their respective surface areas, and instead was equal across the 3 habitat types, with each area contributing roughly 30% of the total N loss via denitrification. Spatially representative characterization of nitrification and denitrification in lentic ecosystems requires incorporation of the spatial variation in these transformations with a particular focus on littoral sediments, and this is often overlooked in studies of lentic N cycling. Furthermore, anthropogenic changes to lake shorelines that influence N cycling in littoral sediments may have a disproportionate effect on whole-lake ecosystem function.