Nitrogen fixation is an ecologically important microbial process that can contribute bioavailable combined N to habitats low in N. Shipworms, or wood-boring bivalves, host N2-fixing and cellulolytic symbiotic bacteria in gill bacteriocytes, which have been implicated as a necessary adaptation to an N-poor C-rich (wooden) diet. Shipworm symbionts are known to fix N within the gill habitat and newly fixed N is subsequently incorporated into non-symbiont containing host tissue. The presence of N2-fixation in gill bacteriocytes presents a conundrum because N2-fixation is tightly regulated by oxygen in most other diazotrophic microbes. Also, the direct evidence of new N being incorporated into the host tissue indicates that there are potentially complex nutrient cycles in this symbiosis, which have not been investigated. We used the cultivated symbiont Teredinibacter turnerae, which has been isolated from many shipworm species, as a model organism to elucidate controls on N2-fixation and N release in the shipworm symbiosis. Our results indicate that headspace oxygen concentration does not control biomass specific N2-fixation and respiration activity in T. turnerae, but it does influence the magnitude of the growth rate and timing of culture growth. Also, we examined the controls of oxygen on inorganic nutrient uptake rates, and documented a small amount of dissolved inorganic nitrogen release. While the N budget is only partially balanced, we provide indirect evidence for the allocation of fixed N to the excretion of exopolymeric substances and dissolved organic nitrogen; future studies that measure these additional N sinks are necessary to close the N budget. Although there are limitations of using pure cultures to investigate a complex symbiotic system, this study provides direct experimental evidence that T. turnerae has adaptations that are conducive to N2-fixation in gill bacteriocytes.