In the agricultural Midwest, subsurface drainage allows excess water to drain into agricultural channels, which flows into rivers and streams transporting excess nutrients downstream. The construction of an inset floodplain within agricultural channels enhances sedimentation of particulate nutrients and sediment, provides stable conditions for vegetation to establish, increases rates of microbial activity, and promotes denitrification. Sediments were collected from floodplains of two-stage channels and naturally forming floodplain benches in conventional channels to determine the effect of floodplain creation on carbon and nitrogen cycling. Denitrification rates were seasonally measured across the floodplain width using an unamended acetylene inhibition technique (DNFAIT). Composite respiration and denitrification rates were measured through sacrificial microcosms utilizing membrane inlet mass spectrometry (DNFMIMS). While the two-stage reach showed a significant increase in soil organic matter (two-way ANOVA, p < 0.001) and respiration rates (two-way ANOVA, p = 0.039), there was no effect on DNFMIMS rates (two-way ANOVA, p > 0.05). DNFAIT rates at the two-stage reach only showed an increase at locations closest to the channel (two-way ANOVA, p = 0.008). Nutrient processing rates were most dependent on local environmental conditions, particularly organic matter and sediment grain size. This suggests that site-specific conditions may dictate the impact of floodplain creation on water quality. However, because of the increase in biologically active surface area, the net effect on water quality is likely greater for the two-stage channels.