A considerable increase in nitrate concentration in groundwater has become a serious concern worldwide. We developed a novel submerged microbial desalination-denitrification cell (SMDDC) to in situ remove nitrate from groundwater, produce electric energy, and potentially treat wastewater. The SMDDC, which was composed of an anode and a cathode chamber, can be easily applied to subsurface environments. When current was produced by bacteria on the anode, NO3- and Na+ were transferred into the anode and cathode through anion and cation exchange membrane, respectively; the anode effluent was directed to the cathode where NO3- was reduced to N2 through autotrophic denitrification. For proof-of-concept, the SMDDC was fed with synthetic wastewater as fuel and submerged into a glass reactor filled with synthetic groundwater. The SMDDC produced 3.4 A/m2 of current density, while removing 90.5% of nitrate from groundwater with 12 h wastewater hydraulic retention time (HRT) and 10 Ω of external resistance. The nitrate concentration and ionic strength of groundwater were the main limiting factors to the system performance. Besides, the external resistance and HRT were also affecting the system performance. Furthermore, the SMDDC showed improved performance with high ionic strength of groundwater (2200 μS/cm) and was able to reduce groundwater salinity as well. External nitrification was beneficial to the current generation and nitrate removal rate, but was not affecting total nitrogen removal. Results clearly indicate that this system holds a great potential for efficient and cost-effective treatment of nitrate-containing groundwater and energy recovery.