We determined spatial variations in potential denitrification activity and the controlling hydrological as well as biochemical processes in the sediments of a Swedish treatment wetland. Hydrological processes, including water residence times, were analyzed using a 2D depth-averaged flow model and the denitrifier community structure was analyzed using denaturing gradient gel electrophoreses (DGGE) of nosZ genes, encoding nitrous oxide reductase. In addition, we provide a theoretical basis for evaluation of denitrification rates useful in nitrate-limited conditions. The results demonstrate that potential denitrification rates differed significantly between the sampling locations (CV=0.34). The variations were best described by concentration of nitrogen in sediments and water residence time. DGGE analyses indicated that a few key populations dominated and that the community diversity increased with decreasing nutrient levels and increasing water residence times. Moreover, we found that denitrification rates in terms of Menten and first-order kinetics can be evaluated by fitting a mathematical expression, comparing denitrification and other nitrogen-transforming processes to measured product formation in nitrate-limited experiments.