In order to better understand phosphorus (P) cycling and origins in the sediment of the Lake Illawarra, two sediment cores were extracted in November, 2010 and a modified sequential extraction scheme (SEDEX) was used to profile the exchangeable P (Pex), reactive Fe/Al-bound P (Preac), reductive Fe/Al-bound P (Predu), authigenic apatite P (Pauth), detrital P (Pdet), organic P (Porg) and residual P (Presi). The total sedimentary P (TP) ranged from 93 to 437 μg g−1, and was dominated by inorganic P. The average percentage of each fraction of P in the sediment followed the sequence: Preac (28.6 %) > Presi (23.5 %) > Pauth (19.1 %) > Predu (17.0 %) > Porg (4.9 %) > Pex (4.7 %) > Pdet (2.2 %). The profiles of TP and Porg showed two peak values with depth, which were matched to land use history in the Lake Illawarra catchment. The sediment depth profiles indicated that Fe oxyhydroxides play a predominant role in the P cycle in the sediments of the lagoon. This is supported by significant positive correlation between Preac and reactive Fe and a negative correlation between Pauth and Fe. Pauth and Preac concentrations were also well negatively correlated, possibly a result of competitive equilibrium between Fe and Ca for P. The estimated P burial efficiency was up to 82 % for this lagoon, which is likely related to the high sediment accumulation rate and the high value of R Fe-P. In addition, the bioavailable P, which consists of Pex, Preac, and Porg, represented a significant proportion of the sedimentary P pool, accounting, on average, for 38 % of the TP. This result indicates that the sediment is a potential internal source of P for this lake ecosystem.