There is ample evidence that tube-dwelling invertebrates such as chironomids significantly alter multiple important ecosystem functions, particularly in shallow lakes. Chironomids pump large water volumes, and associated suspended and dissolved substances, through the sediment and thereby compete with pelagic filter feeders for particulate organic matter. This can exert a high grazing pressure on phytoplankton, microorganisms, and perhaps small zooplankton and thus strengthen benthic-pelagic coupling. Furthermore, intermittent pumping by tube-dwelling invertebrates oxygenates sediments and creates a dynamic, three-dimensional mosaic of redox conditions. This shapes microbial community composition and spatial distribution, and alters microbe-mediated biogeochemical functions, which often depend on redox potential. As a result, extended hotspots of element cycling occur at the oxic-anoxic interfaces, controlling the fate of organic matter and nutrients as well as fluxes of nutrients between sediments and water. Surprisingly, the mechanisms and magnitude of interactions mediated by these organisms are still poorly understood. To provide a synthesis of the importance of tube-dwelling invertebrates, we review existing research and integrate previously disregarded functional traits into an ecosystem model. Based on existing research and our models, we conclude that tube-dwelling invertebrates play a central role in controlling water column nutrient pools, and hence water quality and trophic state. Furthermore, these tiny ecosystem engineers can influence the thresholds that determine shifts between alternate clear and turbid states of shallow lakes. The large effects stand in contrast to the conventional limnological paradigm emphasizing predominantly pelagic food webs. Given the vast number of shallow lakes worldwide, benthic invertebrates are likely to be relevant drivers of biogeochemical processes at regional and global scales, thereby mediating feedback mechanisms linked to climate change.