The relationship between phosphatase activity and the element limiting microbial activity (carbon [C], nitrogen [N], or phosphorus [P]) was studied experimentally in sediment from four stations in the Baltic Sea located along a depth transect from oxic to anoxic bottom waters. The role of extracellular phosphatases was assessed by determining the percentages of intact cells that could be labeled with an artificial substrate for phosphatases (i.e., enzyme-labeled fluorescence 97 phosphatase substrate [ELF]) using a flow cytometer. Phosphatase activity was detected in sediment slurries from all sites either with or without prior incubation under oxic or anoxic conditions. In addition, ELF-labeled cells were detected in all incubated sediments, indicating that intact cells bearing phosphatases contribute to the phosphatase activity. Phosphatase activities and percentages of ELF-labeled cells were lower for the anoxic than for the oxic slurry incubations. Phosphatases are likely used to relieve the limitation of microbial activity by utilizable C in these recently deposited, organic C–rich sediments in the Baltic Sea. In marine sediments overlain by anoxic bottom waters, the biological and chemical mechanisms of P retention are often less efficient than in oxic settings and the P released to relieve C limitation escapes to the overlying water. This explains the ongoing higher P fluxes from sediments overlain by anoxic bottom waters.