Streams of the agricultural Midwest, USA, export large quantities of nitrogen, which impairs downstream water quality, most notably in the Gulf of Mexico. The two-stage ditch is a novel restoration practice, in which floodplains are constructed alongside channelized ditches. During high flows, water flows across the floodplains, increasing benthic surface area and stream water residence time, as well as the potential for nitrogen removal via denitrification. To determine two-stage ditch nitrogen removal efficacy, we measured denitrification rates in the channel and on the floodplains of a two-stage ditch in north-central Indiana for one year before and two years after restoration. We found that instream rates were similar before and after the restoration, and they were influenced by surface water NO3- concentration and sediment organic matter content. Denitrification rates were lower on the constructed floodplains and were predicted by soil exchangeable NO3- concentration. Using storm flow simulations, we found that two-stage ditch restoration contributed significantly to NO3- removal during storm events, but because of the high NO3- loads at our study site, < 10% of the NO3- load was removed under all storm flow scenarios. The highest percentage of NO3- removal occurred at the lowest loads; therefore, the two-stage ditch's effectiveness at reducing downstream N loading will be maximized when the practice is coupled with efforts to reduce N inputs from adjacent fields.