We investigated the role of N₂-fixation by the colony-forming cyanobacterium, Aphanizomenon spp., for the plankton community and N-budget of the N-limited Baltic Sea during summer by using stable isotope tracers combined with novel secondary ion mass spectrometry, conventional mass spectrometry and nutrient analysis. When incubated with ¹⁵N₂, Aphanizomenon spp. showed a strong ¹⁵N-enrichment implying substantial ¹⁵N₂-fixation. Intriguingly, Aphanizomenon did not assimilate tracers of ¹⁵NH₄⁺ from the surrounding water. These findings are in line with model calculations that confirmed a negligible N-source by diffusion-limited NH₄⁺ fluxes to Aphanizomenon colonies at low bulk concentrations (<250 nm) as compared with N₂-fixation within colonies. No N₂-fixation was detected in autotrophic microorganisms <5 μm, which relied on NH₄⁺ uptake from the surrounding water. Aphanizomenon released about 50% of its newly fixed N₂ as NH₄⁺. However, NH₄⁺ did not accumulate in the water but was transferred to heterotrophic and autotrophic microorganisms as well as to diatoms (Chaetoceros sp.) and copepods with a turnover time of ~5 h. We provide direct quantitative evidence that colony-forming Aphanizomenon releases about half of its recently fixed N₂ as NH₄⁺, which is transferred to the prokaryotic and eukaryotic plankton forming the basis of the food web in the plankton community. Transfer of newly fixed nitrogen to diatoms and copepods furthermore implies a fast export to shallow sediments via fast-sinking fecal pellets and aggregates. Hence, N₂-fixing colony-forming cyanobacteria can have profound impact on ecosystem productivity and biogeochemical processes at shorter time scales (hours to days) than previously thought.