  The complete renormalization of the generating functional for Green functions
of quark currents between one-nucleon states in two flavor heavy baryon chiral
perturbation theory is performed to order $q^4$. We show how the heat kernel
method has to be extended for operators orthogonal to the heavy fermion
four-velocity. A method is developed to treat the multi-coincidence limit
arising from insertions of dimension two (and higher) operators on internal
baryon propagators in self-energy graphs. As examples, we study the divergences
in the isoscalar magnetic moment and the scalar form factor of the nucleon.
