Biogeochemical turnover in hyporheic zones is known to have the potential to affect the chemical signature of surface water cycling through shallow streambed sediments. This study investigates the impact of streambed physical properties on the fate of nitrate and dissolved oxygen in groundwater upwelling through the streambed of a lowland river. For analyzing depth-dependent patterns and zonation of nitrogen concentrations, diffuse gel probes in shallow (top 15 cm) streambed sediments have been deployed in a nested setup together with multilevel minipiezometers for streambed sediments of 15–150 cm. Spatial heterogeneity of groundwater upwelling was controlled by patterns of low-conductivity peat and clay strata that caused locally confined conditions, suggesting increased streambed residence times. Nitrate concentrations in the upwelling groundwater changed by up to 68.06 mg L−1 within the top 15 cm of streambed sediments and by up to 107.47 mg L−1 at depths of 15–150 cm, indicating that significant nitrogen turnover was not restricted to shallow streambed sediments. Intensive reduction of nitrate concentrations was found, in particular, in vicinity of low-conductivity streambed strata. The coincidence of confined groundwater upwelling and reduced oxygen concentrations at these locations suggests that increased residence times and associated depletion of dissolved oxygen create conditions favorable for nitrate reduction. Our results highlight that increased nitrogen turnover at aquifer-river interfaces is not necessarily limited to shallow streambed zones, where surface water is mixing with groundwater, but can affect upwelling groundwater in reactive hot spots that extend to greater streambed depths and beyond hyporheic mixing zones.