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Riparian forests are in a unique position in the landscape since they form a transition between uplands and aquatic systems. These ecosystems may be highly susceptible to nitrogen (N) saturation since they may be subject to high inputs of N from upland areas. We measured potential net N mineralization and nitrification, soil inorganic N levels, microbial biomass carbon (C) and N content, and the N content of litter as indicators of N saturation in two riparian zones on the eastern and western sides of a stream. The sites had similar soils, vegetation, and hydrology, but differing upland land use. The eastern or "enriched" site was downgradient of a dense residential housing development (built in the 1950s) that produced high groundwater nitrate (NO3) concentrations. The western or "control"site had an undeveloped upland. Our objectives were (1) to evaluate if groundwater NO3 loading had induced changes in surface soil N—cycle processes that are symptoms of N saturation in the enriched site and (2) to evaluate these changes in relation to inputs and outputs of N to the site. Soil inorganic—N levels, litter N content, and potential net N mineralization and nitrification were significantly higher on the enriched site relative to the control site, suggesting that the enriched site and N saturated. However, input—output analysis indicated that the enriched site was still a sink for upland derived NO3. High rates of denitrification and storage of N in soil organic matter appear to moderate N saturation on the enriched site.