Sediment dredging can permanently remove pollutants from an aquatic ecosystem, which is considered an effective approach to aquatic ecosystem restoration. In this work, a 2-year field simulation test was carried out to investigate the effect of dredging on nitrogen cycling across the sediment-water interface (SWI) in Lake Taihu, China. The results showed that simulated dredging applied to an area rich in total organic carbon (TOC) and total nitrogen (TN) slightly reduced the NH4(+)-N release from sediments while temporarily enhanced the NH4(+)-N release in an area with lower TOC and/or TN (in the first 180 days), although the application had a limited effect on the fluxes of NO2(-)-N and NO3(-)-N in both areas. Further analysis indicated that dredging induced decreases in nitrification, denitrification, and anaerobic ammonium oxidation (anammox) in sediments, notably by 76.9, 49.0, and 89.9%, respectively, in the TOC and/or TN-rich area. Therefore, dredging slowed down nitrogen cycling rates in sediments but did not increase N loading to overlying water. The main reason for the above phenomenon could be attributed to the removal of the surface sediments enriched with more TOC and/or TN (compared with the bottom sediments). Overall, to minimize internal N pollution, dredging may be more applicable to nutrient-rich sediments.