Urban rivers are considered as a hot spot of microbial nitrogen cycling due to extensive N loading. However, microbial nitrogen transformation dynamics in urban rivers with different dissolved oxygen (DO) conditions are still unclear. This study investigated the effects of DO concentration changes (anaerobic to aerobic) in overlying water on nitrogen-cycling gene abundance in incubation conditions using sediment from a typical urban river in the Yangtze River Delta. Q-PCR results revealed that the abundances of the nitrification gene amoA, denitrification gene nirS/K, norB, nosZ, and anammox gene hzo increased by one to two orders of magnitude from anaerobic to aerobic conditions. Ammonia-oxidizing archaea (AOA) predominated the ammonium oxidation microbial populations, about tenfold more than the ammonia-oxidizing bacteria (AOB) populations. Significant correlations were found among the abundances of AOA-amoA, AOB-amoA, nirS, nirK, and hzo genes, implying a close coupling of aerobic ammonium oxidation (AAO), denitrification, and anammox processes at the molecular level. Moreover, the nitrogen transformation rates were calculated using a box model linking the measured dissolved inorganic nitrogen species. The contribution of anammox to N2 production was 85% under saturated treatment, and the AAO rate was significantly positive correlated to the anammox rate. Our results suggested that coupled AAO and anammox might be the dominant pathway for reactive nitrogen removal in urban rivers with elevated DO levels.