Nitrogen (N) input to the coastal oceans has increased considerably because of anthropogenic activities, however, concurrent increases have not occurred in open oceans. It has been suggested that benthic denitrification in sandy coastal sediments is a sink for this N. Sandy sediments are dynamic permeable environments, where electron acceptor and donor concentrations fluctuate over short temporal and spatial scales. The response of denitrifiers to these fluctuations are largely unknown, although previous observations suggest they may denitrify under aerobic conditions. We examined the response of benthic denitrification to fluctuating oxygen concentrations, finding that denitrification not only occurred at high O2 concentrations but was stimulated by frequent switches between oxic and anoxic conditions. Throughout a tidal cycle, in situ transcription of genes for aerobic respiration and denitrification were positively correlated within diverse bacterial classes, regardless of O2 concentrations, indicating that denitrification gene transcription is not strongly regulated by O2 in sandy sediments. This allows microbes to respond rapidly to changing environmental conditions, but also means that denitrification is utilized as an auxiliary respiration under aerobic conditions when imbalances occur in electron donor and acceptor supply. Aerobic denitrification therefore contributes significantly to N-loss in permeable sediments making the process an important sink for anthropogenic N-inputs.