Biological soil crust is composed of lichens, cyanobacteria, green algae, mosses, and fungi. Although crusts are a dominant source of nitrogen (N) in arid ecosystems, this study is among the first to demonstrate their contribution to N availability in xeric temperate habitats. The study site is located in Lucas County of Northwest Ohio. Using an acetylene reduction technique, we demonstrated potential N fixation for these crusts covering sandy, acidic, low N soil. Similar fixation rates were observed for crust whether dominated by moss, lichen, or bare soil. N inputs from biological crusts in northwestern Ohio are comparable to those in arid regions, but contribute substantially less N than by atmospheric deposition. Nitrate and ammonium leaching from the crust layer were quantified using ion exchange resin bags inserted within intact soil cores at 4 cm depth. Leaching of ammonium was greater and nitrate less in lichen than moss crusts or bare soil, and was less than that deposited from atmospheric sources. Therefore, biological crusts in these mesic, temperate soils may be immobilizing excess ammonium and nitrate that would otherwise be leached through the sandy soil. Moreover, automated monitoring of microclimate in the surface 7 cm of soil suggests that moisture and temperature fluctuations in soil are moderated under crust compared to bare soil without crust. We conclude that biological crusts in northwestern Ohio contribute potential N fixation, reduce N leaching, and moderate soil microclimate.