Infaunal inhabitants of coastal marine sediments occupy environments along a continuum from extremely food-rich, low-oxygen regions to food-poor habitats with relatively high levels of available oxygen. In organic-rich sediments, efficient utilization of available organic matter by deposit-feeding macrofauna may often be limited by the supply of oxygen. Specific feeding rate, growth, and production efficiency were measured on single individuals of the polychaete Capitella species 1 to determine whether previously measured declines in growth rates in response to hypoxia were due to decreased feeding, decreased conversion efficiency, or both. Under otherwise constant conditions, feeding rate was determined by the nitrogen content of the sediment, with a greater nitrogen content generally leading to higher specific feeding rates in a manner consistent with recent interpretations of optimal foraging theory. However, the relationship between feeding rate and growth was influenced by oxygen concentration such that in relatively nitrogen-poor sediment, greater growth rates were observed at the lower oxygen level. Simultaneous measurement of growth and feeding rates indicated that the effect of oxygen was due to a decrease in the efficiency with which ingested sediment was converted to tissue under low nitrogen, high oxygen conditions. We suggest that the decreased conversion rate of ingested sediment to body volume under the higher oxygen regime reflected an aerobic metabolic system poised to rapidly exploit available oxygen supplies. The physiological responses measured in our experiments are consistent with the classical faunal successional sequence occurring in a deposit following organic enrichment. When viewed temporally, these faunal changes parallel geochemical changes such that high organic matter, low oxygen conditions give way to higher oxygen levels and decreased concentrations of organic matter. Thus environmental conditions typically change toward those under which Capitella sp. 1 would be expected to perform most poorly. We suggest that an underlying physiological mechanism in Capitella spp. may strongly influence the early successional changes observed following the organic enrichment of soft-bottom benthic environments.