Microbial communities, sulfur isotope of sulfides (δ34SAVS and δ34SCRS) and sulfur and oxygen isotopes of sulfate (δ34SSO4 and δ18OSO4) in sediments were analyzed to study the biotransformation of sulfur in a penguin-affected lake Y2 and a pristine YO from Fildes Peninsula, Antarctic Peninsula. The microbial communities in Y2 were mainly associated with penguin activities, while those in YO were limited by nutrients. The much enriched δ34SSO4 recorded at depth of 30, 41 and 52 cm in Y2 indicates very strong sulfate reduction therein. The sulfur-degrading bacteria Pseudomonas in 0–23 cm of Y2 was 3.5 times as abundant as that of sulfur oxidizing bacteria (SOB), indicating remarkable remineralization of organic sulfur. While abundant SOB and 34S-depleted sulfate indicate considerable sulfur oxidation in 34–56 cm layer in Y2. In YO sediments, the highest abundance of Desulfotalea and the most enriched δ34SSO4 (35.2‰) and δ34SCRS (2.5‰) indicate strongest sulfate reduction in 28 cm layer. High abundance of Pseudomonas indicates active remineralization of organic sulfur in 3–5 cm layer in YO. While the medium δ34SSO4 and considerable abundance of SOB and SRB indicate concurrence of sulfur oxidation and sulfate reduction in other layers in YO. Our results show that high level of organic matter inputs from penguin populations support the diverse microbial community and biotransformation of sulfur in freshwater ecosystems in Antarctica.