Nitrous oxide (N2O) is a potent greenhouse gas that also contributes to stratospheric ozone depletion. Besides microbial denitrification, abiotic nitrite reduction by Fe(II) (chemodenitrification) has the potential to be an important source of N2O. Here, using microcosms, we quantified N2O formation in coastal marine sediments under typical summer temperatures. Comparison between gamma-radiated and microbially-active microcosm experiments revealed that at least 15-25% of total N2O formation was caused by chemodenitrification, whereas 75-85% of total N2O was potentially produced by microbial N-transformation processes. An increase in (chemo)denitrification-based N2O formation and associated Fe(II) oxidation caused an upregulation of N2O reductase (typical nosZ) genes and a distinct community shift to potential Fe(III)-reducers (Arcobacter), Fe(II)-oxidizers (Sulfurimonas), and nitrate/nitrite-reducing microorganisms (Marinobacter). Our study suggests that chemodenitrification contributes substantially to N2O formation from marine sediments and significantly influences the N- and Fe-cycling microbial community.