The soils of mid-Wales in grazed permanent pasture usually exhibit stagnogley features in the top 4-10 cm even though on sloping sites, they are freely drained. Nitrogen is often poorly recovered under these conditions. Our previous studies suggest that continuing loss of available N through concurrent nitrification and denitrification might provide an explanation for poor response to fertilizer N. The work described was designated to further test this proposition. When NH4+-N was applied to the surface of intact cores, equilibrated at -5kPa matric potential, about 70% of NH4+-N initially present was lost within 56 days of incubation. Study of different sections of the cores showed a rise in NO3- level in the surface 0-2.5 cm soil layer but no significant changes below this depth. The imbalance between NO3- accumulation and NH4+ disappearance during the study indicated a simultaneous nitrification and denitrification in the system. Furthermore. the denitrification potential of the soil was 3-4 times greater than nitrification potential so no major build-up of NO3- would be expected when two processes occur simultaneously in micro-scale. When nitrification was inhibited by nitrapyrin, a substantial amount of NH4+-N remained in the soil and persisted till the end of the incubation. The apparent recovery of applied N increased and of the total amount of N applied, 50% more was recovered relative to without nitrapyrin. It appears that addition of nitrapyrin inhibited nitrification, and consequently denitrification, by limiting the supply of NO3- for denitrifying organisms. Emission of N2O from the NH4+ amended soil cores further confirmed that loss of applied N was the result of both nitrification and denitrification, which occurred simultaneously in adjacent sites at shallow depths. This N loss could account for the poor response to fertilizer N often observed in pastoral agriculture in western areas of the UK.