For a large part of earth's history, cyanobacterial mats thrived in low-oxygen conditions, yet our understanding of their ecological functioning is limited. Extant cyanobacterial mats provide windows into the putative functioning of ancient ecosystems, and they continue to mediate biogeochemical transformations and nutrient transport across the sediment-water interface in modern ecosystems. The structure and function of benthic mats are shaped by biogeochemical processes in underlying sediments. A modern cyanobacterial mat system in a submerged sinkhole of Lake Huron (LH) provides a unique opportunity to explore such sediment-mat interactions. In the Middle Island Sinkhole (MIS), seeping groundwater establishes a low-oxygen, sulfidic environment in which a microbial mat dominated by Phormidium and Planktothrix that is capable of both anoxygenic and oxygenic photosynthesis, as well as chemosynthesis, thrives. We explored the coupled microbial community composition and biogeochemical functioning of organic-rich, sulfidic sediments underlying the surface mat. Microbial communities were diverse and vertically stratified to 12 cm sediment depth. In contrast to previous studies, which used low-throughput or shotgun metagenomic approaches, our high-throughput 16S rRNA gene sequencing approach revealed extensive diversity. This diversity was present within microbial groups, including putative sulfate-reducing taxa of Deltaproteobacteria, some of which exhibited differential abundance patterns in the mats and with depth in the underlying sediments. The biological and geochemical conditions in the MIS were distinctly different from those in typical LH sediments of comparable depth. We found evidence for active cycling of sulfur, methane, and nutrients leading to high concentrations of sulfide, ammonium, and phosphorus in sediments underlying cyanobacterial mats. Indicators of nutrient availability were significantly related to MIS microbial community composition, while LH communities were also shaped by indicators of subsurface groundwater influence. These results show that interactions between the mats and sediments are crucial for sustaining this hot spot of biological diversity and biogeochemical cycling.