Nitrogen fixation has been detected by the acetylene reduction method in the sediments of the Waccasassa estuary, a shallow embayment on the Florida Gulf Coast. Fixation rates in the range 1.6–15.0 ng C2H4/g sediment‐hr were found within the top 2–5‐cm stratum of sediments. Expressed in terms of equivalent nitrogen fixed, the range was 0.64–6.0 ng N/g‐hr. Much lower rates (0.03–0.40 ng C2H4/g‐hr) were found at greater depths in the sediment, and no fixation was observed in the flocculent unconsolidated 1–2 cm at the sediment surface.All evidence indicates that the reduction of acetylene to ethylene is a biological phenomenon, directly related to the activity of nitrogen‐fixing organisms in the sediments. Nitrogen‐free media produced growths of Gram‐positive spore‐forming rods from sediments under an N2 atmosphere. A pure culture similar to Clostridium sp. was isolated on nitrogen‐free media from Waccasassa sediments and was shown capable of nitrogen fixation by the acetylene reduction method.