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Coastal ecosystems are important because of the vital ecosystem functions and services they provide, but many are threatened by eutrophication and hypoxia. This results in loss of biodiversity and subsequent changes in ecosystem functioning. Consequently, the need for empirical field studies regarding biodiversity-ecosystem functioning in coastal areas has been emphasized. The present field study quantified the links between benthic macrofaunal communities (abundance, biomass, and species richness), sediment oxygen consumption, and solute fluxes (NO3 − + NO2 −, NH4 +, PO4 3−, SiO4, Fe, Mn) along a 7.5-km natural gradient of seasonal hypoxia in the coastal northern Baltic Sea. Sampling was done in late August 2010 in the middle archipelago zone of the Hanko peninsula, Finland. As predicted, the macrofaunal communities were decimated with increasing hypoxia, and the nutrient transformation processes were changed at the sediment-water interface, with notably higher effluxes of phosphate and ammonium from the sediment. Solute fluxes varied even during normoxia, which implies a high context-dependency, and could be explained by even small variations in environmental variables such as organic matter and C/N ratios. Importantly, the low diversity benthic macrofaunal communities, which were dominated by Macoma balthica and the invasive Marenzelleria spp., had a large influence on the solute fluxes, especially under normoxia, but also under hypoxia.