Lake Shihwa, artificially constructed since 1988, shows a typical two-layered system depending on strong haline density stratification. Sill of the water gate at 6 m depth greatly restricts physical mixing with outer seawater and circulation in the lake, and contributes to the enhancement of anoxic environment in the deeper layer. With this enclosed physical environment, Lake Shihwa receives enormous amounts of organics, ammonia, and other pollutants from the neighboring municipal and industrial complexes through six major streams, thus developing biogeochemical differentiation of anoxic to suboxic environment in the high saline bottom water and highly eutrophicated brackish surface water. This study investigated vertical structures, biogeochemical behaviors and processes of various organic and inorganic compounds around oxic-anoxic interface. Nitrite and nitrate rapidly decreased below the pycnocline where about tons of hypoxic bottom water exist. In this bottom layer, ammonium ranged from 75 to 360 mainly resulting from deamination of dissolved organic nitrogen and ammonification of precipitated organic particles. Despite large amounts of surface water discharge and dilution by outer seawater inflow about tons from April to August, 1996, bottom layer did not show any improvement of water quality and maintained highly reduced environment. The main reason seems to be imbalance between ineffectiveness of dilution due to shallow depth and large surface area, overloaded POC influx from the eutrophicated surface biological activity, and poor replenishment of oxygen in this artificial lake system. Therefore, as long as current salinity dependent two-layered system maintains with its physical limitations, any improvement of water quality cannot be foreseen in Lake Shihwa.