The degradation of ecosystems is often associated with losses of large organisms and the concomitant losses of the ecological functions they mediate. Conversely, the resilience of ecosystems to stress is strongly influenced by faunal communities and their impacts on processes. Denitrification in coastal sediments is a process that may provide ecosystem resilience to eutrophication by removing excess bioavailable nitrogen. Here, we conducted a large-scale field experiment to test the effect of macrofaunal community composition on denitrification in response to two levels of nutrient enrichment at 28 sites across a biologically heterogeneous sandflat. After 7 weeks of enrichment, we measured denitrification enzyme activity (DEA) along with benthic macrofaunal community composition and environmental variables. We normalised treatment site specific DEA values by those in ambient sediments (DEACN) to reveal the underlying response across the heterogeneous landscape. Nutrient enrichment caused reductions in DEACN as well as functional changes in the community; these were both more pronounced under the highest level of nutrient loading (on average DEACN was reduced by 34%). The degree of suppression of DEACN following moderate nitrogen loading was mitigated by a key bioturbating species, but following high nitrogen loading (which reduced the key species density) the abundance and diversity of other nutrient processing species were the most important factors alleviating negative effects. This study provides a prime example of the context-dependent role of biodiversity in maintaining ecosystem functioning, underlining that different elements of biodiversity can become important as stress levels increase. Our results emphasise that management and conservation strategies require a real-world understanding of the community attributes that facilitate nutrient processing and maintain resilience in coastal ecosystems.