The recent detection of heterotrophic nitrogen (N-2) fixation in deep waters of the southern Californian and Peruvian OMZ questions our current understanding of marine N-2 fixation as a process confined to oligotrophic surface waters of the oceans. In experiments with Crocosphaera watsonii VVH8501, a marine unicellular diazotrophic (N-2 fixing) cyanobacterium, we demonstrated that the presence of high nitrate concentrations (up to 800 mu M) had no inhibitory effect on growth and N-2 fixation over a period of 2 weeks. In contrast, the environmental oxygen concentration significantly influenced rates of N-2 fixation and respiration, as well as carbon and nitrogen cellular content of C. watsonii over a 24-h period. Cells grown under lowered oxygen atmosphere (5%) had a higher nitrogenase activity and respired less carbon during the dark cycle than under normal oxygen atmosphere (20%). Respiratory oxygen drawdown during the dark period could be fully explained (104%) by energetic needs due to basal metabolism and N-2 fixation at low oxygen, while at normal oxygen these two processes could only account for 40% of the measured respiration rate. Our results revealed that under normal oxygen concentration most of the energetic costs during N-2 fixation (similar to 60%) are not derived from the process of N-2 fixation per se but rather from the indirect costs incurred for the removal of intracellular oxygen or by the reversal of oxidative damage (e.g., nitrogenase de novo synthesis). Theoretical calculations suggest a slight energetic advantage of N-2 fixation relative to assimilatory nitrate uptake, when oxygen supply is in balance with the oxygen requirement for cellular respiration (i.e., energy generation for basal metabolism and N-2 fixation). Taken together our results imply the existence of a niche for diazotrophic organisms inside oxygen minimum zones, which are predicted to further expand in the future ocean.