Abstract Recent studies of nutrient cycling in Sycamore Creek in Arizona, USA, suggest that a thorough understanding requires a spatially explicit, hierarchical approach. Physical configuration determines the path that water follows as it moves downstream. Water follows flowpaths through surface stream components, the hyporheic zone beneath the surface stream, and the parafluvial (sand bar) zone. Characteristic biogeochemical processes in these subsystems alter nitrogen (N) species in transport, in part as a function of available concentrations of N species. At several hierarchical levels, substrate materials are an important determinant of nitrogen dynamics in desert streams. Sand is present in bars of variable size and shape, each of which can be considered a unit, interacting with the surface stream. Groups of these stream-sandbar units form a higher level, the reach. At the next higher scale, sandy reaches (runs) alternate with riffles. Where flowpaths converge, rates of N transformation are high and, as a result, change in concentration is a non-linear function of flowpath length. Disturbance by flash floods alters sandbar configuration. Between floods, the interaction of subsurface and surface flowpaths shapes configuration in each, thus a self-organizing element of spatial structure exists. Sandy runs are dominated by subsurface processes and are likely to be net nitrifiers while riffles are dominated by surface flow and are nitrogen fixers. Whether a stream ecosystem retains nitrogen, or transports it to downstream recipient systems, or is a net emitter of gaseous forms of N, depends upon the dynamics of a spatial mosaic of interacting elements. An understanding of the net effect of this mosaic requires a spatially explicit, hierarchical, multi-scale approach.