In oxygen-depleted zones of the open ocean, and in anoxic basins and fjords, denitrification (the bacterial reduction of nitrate to give N2) is recognized as the only significant process converting fixed nitrogen to gaseous N2. Primary production in the oceans is often limited by the availability of fixed nitrogen such as ammonium or nitrate, and nitrogen-removal processes consequently affect both ecosystem function and global biogeochemical cycles. It was recently discovered that the anaerobic oxidation of ammonium with nitrite--the 'anammox' reaction, performed by bacteria--was responsible for a significant fraction of N2 production in some marine sediments. Here we show that this reaction is also important in the anoxic waters of Golfo Dulce, a 200-m-deep coastal bay in Costa Rica, where it accounts for 19-35% of the total N2 formation in the water column. The water-column chemistry in Golfo Dulce is very similar to that in oxygen-depleted zones of the oceans--in which one-half to one-third of the global nitrogen removal is believed to occur. We therefore expect the anammox reaction to be a globally significant sink for oceanic nitrogen.