Middle Island sinkhole (23 m depth) is an underwater karst feature in Lake Huron (MI, USA) inundated with hypoxic, high-conductivity groundwater. Here, microbial mats composed of purple-pigmented filamentous cyanobacteria cover carbon-rich sediments. To study the species diversity of Archaea and Eukarya in this habitat, we constructed clone libraries and sequenced the small subunit ribosomal RNA genes from sediment cores sectioned into five visually distinct layers: the surface cyanobacterial mat (0–0.2 cm), an underlying white crystalline layer (0.2–0.5 cm), and three sub-sections of black organic-rich sediment chosen from distinct layers in the cores (0.5–2.0 cm, 7.5–9.5 cm, and 24.5–28.5 cm). Clone libraries from the cyanobacterial mat were dominated by eukaryal 18S rRNA gene sequences such as nematodes (Tobrilus gracilis), ciliates (Frontonia vernalis), and tardigrades (Isohypsibius granulifer). Shallow organic-rich sediments shared clones with the overlying mat but also included seed shrimp (Cyprididae sp.) and copepods (Leptodiaptomus spp.). Clone libraries from the deepest sediments were dominated by archaeal sequences similar to known methanogens (Methanosphaerula and Methanosaeta) and uncultivated Archaea, including non-thermophilic Crenarchaeota. Phylogenetic trees revealed representation in diverse eukaryotic and archaeal lineages. By chronicling the species composition of freshwater sinkholes, this study expands our knowledge of microbial communities in habitats influenced by hypoxic, sulfur-rich groundwater.