Two-stage ditch construction is a novel restoration technique intended to reduce nitrogen and sediment export from agricultural streams by recreating floodplain benches in formerly ditched channels.  Increased floodplain surface area increases water-benthos contact time during storm flows, which may promote biological processing and nitrogen removal via denitrification.  Two-stage benches were constructed in a northern Indiana stream in November 2007. We quantified in-stream and bench sediment denitrification rates every other month, beginning >1yr prior to the two-stage restoration.  Pre-restoration, in-stream denitrification rates ranged from 5.0 µgN/gAFDM/h in October to 32.8 µgN/gAFDM/h in August and could be explained by stream nitrate concentration.  Mean pre-restoration bench denitrification rates averaged 2.5 g N/m²/day, resulting in the removal of 1,870 g N/day in the 620 m reach. Restoration increased floodplain area from 756 m² to 3,780 m², increasing the average daily reach-scale nitrogen removal rate to 9,360 g/day.  In-stream benthic area did not change as a result of restoration, and average in-stream N removal was 1,932 g N/day.  Bench denitrification rates increased significantly when inundated, indicating that denitrification rates are maximized when the benches are saturated (e.g. during storms).  Thus, restored floodplains via two-stage restoration have the potential to decrease N export from agricultural streams.