A new process for the removal of nitrogen from wastewater is introduced. The process involves three steps: (1) partial nitrification of NH₄⁺ to NO₂⁻; (2) partial anoxic reduction of NO₂⁻ to N₂O; and (3) N₂O conversion to N₂ with energy recovery by either catalytic decomposition to N₂ and O₂ or use of N₂O to oxidize biogas CH₄. Steps 1 and 3 have been previously established at full-scale. Accordingly, bench-scale experiments focused on step 2. Two strategies were evaluated and found to be effective: in the first, Fe(II) was used to abiotically reduce NO₂⁻ to N₂O; in the second, COD stored as polyhydroxybutyrate (PHB) was used as the electron donor for partial heterotrophic reduction of NO₂⁻ to N₂O. For abiotic reduction with Fe(II), the efficiency of conversion of NO₂⁻ to N₂O was over 90% with 98% nitrogen removal from water. For partial heterotrophic denitrification, different selection conditions were imposed on acetate- and nitrite-fed communities initially derived from waste activated sludge. No N₂O was detected when acetate and nitrite were supplied continuously, but N₂O was produced when acetate and nitrite were added as pulses. N₂O conversion efficiency was dependent upon the method of addition of acetate and nitrite. When acetate and nitrite were added together (coupled feeding), the N₂O conversion efficiency was 9–12%, but when acetate and nitrite additions were decoupled, the N₂O conversion efficiency was 60–65%. Decoupled substrate addition selected for a microbial community that accumulated polyhydroxybutyrate (PHB) during an anaerobic period after acetate addition then consumed PHB and reduced NO₂⁻ during the subsequent anoxic period. The biological N removal efficiency from the water was 98% over more than 200 cycles. This indicates that decoupled operation can sustain significant long-term N₂O production. Compared to conventional nitrogen removal, the three-step process, referred to here as Coupled Aerobic–anoxic Nitrous Decomposition Operation (CANDO), is expected to decrease oxygen requirements, decrease biomass production, increase organic matter available for recovery as biogas methane, and enable energy recovery from nitrogen, but pilot-scale studies are needed.