Wood-boring bivalves (Bivalvia, family Teredinidae), also known as shipworms, host dinitrogen-fixing and cellulolytic symbiotic bacteria in gill bacteriocytes, which may be a necessary adaptation to a wooden diet. Although oxygen (O2) inhibits nitrogenase in other species, symbionts are able to fix nitrogen (N) within the gill tissue and provide newly fixed N to the host shipworm. The recent direct evidence of new N incorporation into the host tissue indicates that there are potentially complex nutrient cycles in this symbiosis and uninvestigated controls upon these cycles.To elucidate the mechanisms of this unique N2-fixing symbiosis and determine whether symbionts can excrete newly fixed N, we measured rates of growth, N2-fixation, respiration, and inorganic N content for the cultivated symbiont Teredinibacter turnerae (γ-proteobacteria, strain T7901) under a range of headspace O2 conditions. In all conditions, headspace O2 did not affect maximum specific N2-fixation and respiration activity, but did influence the rate and timing of growth. These results are consistent with the development of microaerobic conditions through an oxygen gradient in the culture medium, which facilitates N2-fixation and growth. The medium accumulated a small amount of NH4+, which represented 0.5–2.5% of the total N fixed by the culture. We constructed a simple N budget for T. turnerae to assess the role of the major known N sources and sinks. The N budget was not closed, indicating that new N is allocated to currently unidentified sinks, which may include excreted dissolved organic nitrogen.