Acetylene inhibition and 13N methods were used to assay digested sludge for its potential to denitrify and to reduce nitrate to ammonium. At nitrate concentrations below 10 microM, the reduction of N2O to N2 was not inhibited by acetylene concentrations as high as 80 kPa, though at higher nitrate concentration acetylene was an effective inhibitor. NO, N2O, and N2 were produced immediately after addition of nitrate or nitrite, indicating that denitrifying enzymes were present. NO was maintained at a higher concentration of 2--5 nM, while nitrate or nitrite were being reduced, but this gas was depleted once the ionic N oxide substrates were exhausted. Acetylene had little effect on appearance and disappearance of NO. It was also noted that NO was readily consumed by chemical reactions in the anaerobic sludge. Added N2O was reduced without a lag, but pasteurized samples did not consume N2O although they produced it. Fresh digested sludge reduced 60--70% of the added 13NO3- to 13NH4+ with the rest of the NO3- -N presumably lost to denitrification. This agrees well with the nitrate partitioning observed by the acetylene inhibition method in which 30--40% of the NO3- -N was recovered as N2O. Denitrification capacity persisted in both digested sludge and a methanogenic enrichment culture which had been grown in a chemostat for 2.5 years with acetate and ammonium as the sole carbon and nitrogen source. This suggests that denitrifiers with capacities for alternative anaerobic energy metabolism may be more common than now known.