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The combined influences of intensive mussel aquaculture and watershed nutrient inputs on nitrogen dynamics in Tracadie Bay, Prince Edward Island, Canada, were examined using a nitrogen budget and an ecosystem model. Budget calculations, and inputs and parameters for the model were based on extensive field data. Both approaches showed that mussel aquaculture has a dominant influence on all aspects of the nitrogen cycle and dramatically alters pathways by which nitrogen reaches the phytoplankton and benthos. A large proportion of phytoplankton production is supported by land-derived nitrogen and this anthropogenic input is important for sustaining existing levels of mussel production. The amount of nitrogen removed in the mussel harvest is small compared with agricultural nitrogen inputs and the amounts excreted and biodeposited on the seabed. Mussel biodeposition greatly increases the flux of nitrogen to the benthos, with potentially serious eutrophication impacts. Results from the observation-based nitrogen budget and dynamic model were compared and both support the above conclusions. However, the ability of the model to test different scenarios and to provide additional information (e.g. fluxes) over a finer spatial scale led to insights unattainable with a nitrogen budget. For example, food appears to be less available to mussels at the head of the Bay than at the mouth, despite the lower density of grow-out sites in the former location. The number of fundamental ecosystem processes influenced by the mussels and the complexity of their interactions make it difficult to predict the effects of mussels on many ecosystem properties without resorting to a model.