In marine sediments, the major anaerobic mineralization processes are Fe(III) oxide reduction and sulfate reduction. In this article, we propose that the two alternative microbial mineralization pathways in sediments exert decisively different impacts on aquatic ecosystems. In systems where iron reduction dominates in the recently deposited sediment layers, the fraction of Fe(III) oxides that is dissolved to Fe(II) upon reduction will ultimately be transported to the oxic layer, where it will be reoxidized. Phosphorus, which is released from Fe(III) oxides and decomposing organic matter from the sediment, will be largely trapped by this newly formed Fe(III) oxide layer. Consequently, there are low concentrations of phosphorus in near-bottom and productive water layers and primary production tends to be limited by phosphorus (State 1). By contrast, in systems where sulfate reduction dominates, Fe(III) oxides are reduced by sulfides. This chemical reduction leads to the formation and permanent burial of iron as solid iron sulfides that are unable to capture phosphorus. In addition, the cycling of iron is blocked, and phosphorus is released to overlying water. Owing to the enrichment of phosphorus in water, the nitrogen : phosphorus ratio is lowered and nitrogen tends to limit algal growth, giving an advantage to nitrogen-fixing blue-green algae (State 2). A major factor causing a shift from State 1 to State 2 is an increase in the flux of labile organic carbon to the bottom sediments; upon accelerating eutrophication a critical point will be reached when the availability of Fe(III) oxides in sediments will be exhausted and sulfate reduction will become dominant. Because the reserves of Fe(III) oxides are replenished only slowly, reversal to State 1 may markedly exceed the time needed to reduce the flux of organic carbon to the sediment. A key factor affecting the sensitivity of a coastal system to such a regime shift is formed by the hydrodynamic alterations that decrease the transport of O₂ to the near-bottom water, e.g., due to variations in salinity and temperature stratification.