Lakeshore wetlands are thought to be hot spots for biogeochemical processes. However, many lakeshore wetlands have been hydrologically disconnected from the associated lake by levees that have altered the ecosystem services they provide. Lakeshore restoration projects have been undertaken to recover the hydrological connection; however, the effects of the various restoration practices on biogeochemical cycling remain unclear. Here, we compared variation in sediment nitrogen (N) cycling rates to assess the restoration benefits of N removal in a series of recently hydrologically restored lakeshore wetlands, including ponds and bottomlands, of Lake Dianchi, China. The results showed that nitrification rates were generally higher in the ponds, while denitrification rates were higher in the bottomlands. Hydrological reconnection stimulated the development of several sediment properties critical for N cycling rates in the ponds, including increases in sediment carbon (C) and N contents; however, bottomland reconnection increased sediment moisture and decreased sediment C and N contents likely due to erosion by wind-induced wave action. Correspondingly, hydrological reconnection significantly increased the sediment N cycling rates in ponds but decreased the sediment N cycling rates in bottomlands over time. Path analyses revealed that substrate characteristics, including moisture and C and N availability, were the critical drivers regulating wetland N cycling rates. These results imply that the restoration targets could not be met simply by hydrological reconnection. Future wetland restoration requires further understanding of the relationship between changes in sediment properties and biogeochemical processes.