Monitoring nutrient concentrations at fine‐scale temporal resolution contributes to a better understanding of nutrient cycling in stream ecosystems. However, the mechanisms underlying fine‐scale nutrient dynamics and its implications for budget catchment fluxes are still poorly understood. To gain understanding of patterns and controls of fine‐scale stream nitrogen (N) dynamics and to assess how they affect hydrological N fluxes, we explored diel variation in stream nitrate (NO3¯) concentration along a headwater stream with increasing riparian area and channel width. At the downstream site, the highest day-night variations occurred in early spring, when stream NO3¯ concentrations were 13% higher at night than at daytime. Such day-night variations were strongly related to daily light inputs (R2 = 0.74) and gross primary production (GPP; R2 = 0.74), and they showed an excellent fit with day-night NO3¯ variations predicted from GPP (R2 = 0.85). These results suggest that diel fluctuations in stream NO3¯ concentration were mainly driven by photoautotrophic N uptake. Terrestrial influences were discarded because no simultaneous diel variations in stream discharge, riparian groundwater level, or riparian solute concentration were observed. In contrast to the downstream site, no diel variations in NO3¯ concentration occurred at the upstream site, likely because water temperature was colder (10°C vs. 12°C) and light availability was lower (4 vs. 9 mol·m−2·d−1). Although daily GPP was between 10‐ and 100‐fold lower than daily respiration, photoautotrophic N uptake contributed to a 10% reduction in spring NO3¯ loads at the downstream site. Our study clearly shows that the activity of photoautotrophs can substantially change over time and along the stream continuum in response to key environmental drivers such as light and temperature, and further, that its capacity to regulate diel and seasonal N fluxes can be important even in low‐productivity streams.