Shallow and eutrophic Baiyangdian Lake is a decaying lake and has broad ecotone wetlands, composed of reed communities and ditches. Experiments were carried out to study the fate of nutrients and organic pollutants during the runoff, flowing from a contaminated river through the ecotone to the lake. Under moderate hydrological conditions, water flows through the ditches and through the root zone soil of the reed community. The retention of total nitrogen (TN) and total phosphorus (TP) by surface flow through a 300-m ditch was measured to be 42% and 65% respective-ly. The retention of TN and TP by an 8-m stretch of reed community soil was 59% and 88%. The retention by the reed community mainly happened at the rhizosphere below the soil surface. The removal of organic matter was also observed. The retention of nutrients by the subsurface flow was more than 10 times greater than that by surface flow. The harvest of reed biomass recycles 1120 metric tons of nitrogen and 53 tons of phosphorus from lake-side ecotones back to the terrestrial ecosystems each year. There is a potential use of ecotone wetlands as the advanced treatment facility for nutrient-rich water, and a good design can enhance the treatment efficiency. Ecotone engineering for advanced water treatment is an economical method with low environmental risks and high efficiency.