The nitrogen (N) cycle is of global importance, as N is an essential element and a limiting nutrient in terrestrial and aquatic ecosystems. Excessive anthropogenic N fertilizer usage threatens sensitive downstream aquatic ecosystems. Although freshwater lake sediments remove N through various microbially mediated processes, few studies have investigated the microbial communities involved. In an integrated biogeochemical and microbiological study on a eutrophic and oligotrophic lake, we estimated N removal rates from pore water concentration gradients in sediments. Simultaneously, the abundance of different microbial N transformation genes was investigated using metagenomics on a seasonal and spatial scale. We observed that contrasting nutrient concentrations in sediments were associated with distinct microbial community compositions and significant differences in abundances of various N transformation genes. For both characteristics, we observed a more pronounced spatial than seasonal variability within each lake. The eutrophic Lake Baldegg showed a higher denitrification potential with higher nosZ gene (N2O reductase) abundances and higher nirS:nirK (nitrite reductase) ratios, indicating a greater capacity for complete denitrification. Correspondingly, this lake had a higher N removal efficiency. The oligotrophic Lake Sarnen, in contrast, had a higher potential for nitrification. Specifically, it harbored a high abundance of Nitrospira, including some with the potential for comammox. Our results demonstrate that knowledge of the genomic N transformation potential is important for interpreting N process rates and understanding how the lacustrine sedimentary N cycle responds to variations in trophic conditions. IMPORTANCE Anthropogenic nitrogen (N) inputs can lead to eutrophication in surface waters, especially in N-limited coastal ecosystems. Lakes effectively remove reactive N by transforming it to N2 through microbial denitrification or anammox. The rates and distributions of these microbial processes are affected by factors such as the amount and quality of settling organic material and nitrate concentrations. However, the microbial communities mediating these N transformation processes in freshwater lake sediments remain largely unknown. We provide the first seasonally and spatially resolved metagenomic analysis of the N cycle in sediments of two lakes with different trophic states. We show that lakes with different trophic states select for distinct communities of N-cycling microorganisms with contrasting functional potentials for N transformation.