Dense submerged macrophyte stands in lakes may promote alternating daytime stratification and nighttime convective mixing, driving extensive spatiotemporal variations in water temperature, oxygen, pH, and inorganic carbon (DIC). We set out to investigate environmental conditions and ecosystem metabolism in the macrophyte-dominated littoral zone (0.6 m depth) of a shallow, mesotrophic lake and compared this with the pelagic zone (3.0 m deep). We found that, during summer, vertical water column gradients only occasionally occurred and were weak in the pelagic zone, while dense littoral macrophyte stands of charophytes exhibited strong diel changes and steep daytime temperature and oxygen depth gradients. Oxygen showed daytime surface supersaturation and bottom anoxia, alternating with nighttime mixing. In spring, before charophytes appeared, the vertical gradients were largely absent. Ecosystem metabolism was primarily positive in spring, but areal rates of daily gross primary production (GPP) and closely related respiration increased 6-fold in summer. Ecosystem metabolism calculated based on oxygen or DIC was very similar, with a 1:1 M basis. Daytime DIC loss by CaCO₃ precipitation on charophyte surfaces averaged 6.3% of total DIC loss, and this loss was restored during nighttime. The contribution of shallow littoral macrophyte communities to whole-lake summer GPP exceeded that estimated for phytoplankton. Environmental conditions in the macrophyte-covered littoral zone differed markedly from pelagic waters with steep vertical gradients in temperature and chemistry during daytime including anoxic micro-habitats in stark contrast to deep pelagic waters. The study highlights the significant influence of the littoral zone and macrophytes on whole-lake ecosystem processes.