Water level drawdown followed by rewetting in reservoirs/lakes can shift macrophytes from a nutrient sink to a source, thus changing nutrient dynamics and causing water quality problems. However, there is limited understanding of the effect of macrophyte growth versus decomposition on nitrogen (N) and phosphorus (P) dynamics during water level fluctuations (WLFs). This study examined nutrient release versus uptake by two submerged macrophytes, the invasive Cabomba caroliniana (Cabomba) and the native Hydrilla verticillata (Hydrilla), compared to bare sediments, after drying then rewetting. Overall, we examined the nutrient dynamics in treatments comparing 1) two macrophyte species, 2) macrophyte nutrient uptake versus release, and 3) the presence of macrophytes versus bare sediments. Our study showed that Cabomba litter had a higher nutrient release rate and resulted in higher water column chlorophyll a concentrations compared with Hydrilla litter. The decomposition impact of both species on water column P concentrations was greater than that for N, and proportionally less P was assimilated than released by macrophytes compared with N. This resulted in P accumulation and a decreased N:P ratio in the water column compared to bare sediments without macrophytes. Phosphorus accumulation in the water column during macrophyte decomposition increased phytoplankton growth in our study, highlighting the potential for phytoplankton blooms, especially in P-deficient lakes. Regrown Hydrilla had a higher potential for assimilating sediment N compared to Cabomba. In contrast, regrown Cabomba was more efficient at reducing water column N compared with Hydrilla, suggesting different pathways of assimilation. Neither regrown Cabomba nor Hydrilla significantly reduced water column P concentrations. This study highlights different nutrient impacts of macrophyte beds compared to bare sediments during WLFs, and the role of regrown macrophytes in assimilating the released nutrients from macrophyte decomposition. However, the scale of their role is dependent on macrophyte species, forms of nutrients and drying-wetting regimes.