Soil and water interactions and their influence on growth and production in different densities (SD8 & SD16) under zero water exchange were studied in two successive crops of Penaeus monodon in Tamil Nadu, India during 2007 and 2008. Scraping and tilling during pond preparation increased the mineralization rate than scraping only. During crop, there was no significant difference in soil organic carbon and total nitrogen between the SDs. However, as the crop progressed, organic carbon and total nitrogen content of the soil showed significant difference under both the SDs. Between the SDs, nitrate and phosphate content in water significantly differed, whereas the progress of the crop significantly increased both available and total nutrients. Mass balance of nitrogen indicated that applied feed contributed to 97.4–98.5% of input nitrogen, of which nitrogen in sediment accounted for 16.5–27.3%, nitrogen recovery in shrimp was 34.2–43.6% and the nitrogen lost through denitrification and volatilization varied from 4.7% to 34.7%. Zero water exchange system is highly efficient as nitrogen recovery is higher in shrimp and lower in discharge water. Lack of significant difference in metabolites between the SDs indicates the role of aeration and probiotics in sustaining SD16 cultures.