In situ denitrification relies on indigenous microorganisms to reduce nitrate to N(2) gas. However, when initial nitrate concentrations are large, produced gas volumes also can be very large, potentially resulting in reduced water saturation and hydraulic conductivity in the treatment zone. In this study, we investigated the fate of N(2) and other gases produced during denitrification in a laboratory flow cell containing packed sediment. Denitrifying activity was stimulated by additions of nitrate and ethanol. Microbial activity was monitored by measuring nitrate, nitrite, and ethanol concentrations; gas saturations were measured during the experiment using a gamma imaging system. Biomass was measured using phospholipid fatty acid analysis of sediment samples. Bioenergetic calculations calibrated to measured nitrate consumed and biomass produced predicted that 1.2 L N(2) gas/L water should have been produced following the addition of 100 mM nitrate. However, the maximum measured gas saturation was only 23%, indicating substantial gas loss from the sediment pack. Temporal gamma images and visual observations confirm that small gas bubbles formed in the sediment pack coalesced into larger bubbles and migrated upward through gas-filled channels to the sediment pack surface. Although gas saturations increased, there was no significant change in sediment pack hydraulic conductivity. These results suggest that in permeable reactive barriers used for in situ denitrification, gas production will not necessarily lead to unlimited gas accumulation in the pore space and that the effects of gas production on water saturation and hydraulic conductivity may be relatively minor.