Cyanobacterial blooms have been increasing worldwide due to increased nutrients associated with urban, industrial, and agricultural development. Blooms that occur in the Indian River Lagoon (IRL), Florida may be increased by nutrient-laden runoff from storm water and non-point sewage pollution due to alterations to the watershed. In the IRL, during the summer of 2006, extensive blooms of the marine cyanobacterium, Lyngbya majuscula, were observed forming mats throughout beds of the seagrass Halodule wrightii in Fort Pierce, Florida. The effects of cyanobacterial blooms were compared to artificial shading of H. wrightii to assess the shading potential of L. majuscula. The combined effects of L. majuscula removal and artificial shading showed increases in the below ground biomass of H. wrightii. However, leaf length increased in the presence of L. majuscula. In response to artificial shading, H. wrightii decreased in density, but showed similar leaf elongation. A common bivalve in our study area, Macoma constricta, increased in density when L. majuscula was removed. Therefore, when L. majuscula blooms occur, light limitation is one of the mechanisms altering H. wrightii density and leaf lengths in the IRL. Loss of H. wrightii biomass due to shading from cyanobacterial mats may further damage the diversity and habitat value of the IRL.