Recent articles concerning the potential effect of nitrous oxide (N2O) on stratospheric ozone have emphasized the need for research to identify sources and sinks of atmospheric N2O. Work reported shows that soils have a significant capacity for uptake of N2O and may represent an important natural sink for atmospheric N2O. Uptake of N2O by soils is a microbial process involving reduction of N2O to N2. It is promoted by anaerobic conditions and by organic substances that promote growth of soil microorganisms, and it is retarded by nitrate. Studies with nine Iowa surface soils showed that their capacity for uptake of N2O under conditions favorable for denitrification of nitrate was much greater than their capacity for release of this gas.