The objective of this study is to clarify the effect of ulvoid (Ulva spp.) accumulation on the formation of an eelgrass bed on the coast of Iwakuni, Seto Inland Sea, Japan. We monitored eelgrass shoot density and height and ulvoid volume in the study site, and then conducted experiments on the effects of ulvoid canopy on eelgrass using outdoor tanks. Eelgrass shoot density decreased when ulvoid accumulated, and seedling density decreased as ulvoid volume increased. We found no eelgrass seedlings, when the ulvoid canopy height was more than 20 cm. According to the outdoor tank experiments, the survival rate of eelgrass in the 13 cm ulvoid canopy height tank for more than one month differed little from that of eelgrass in the control tank. However, eelgrass in the 25 cm ulvoid canopy height tank died out in 38 days. Eelgrass leaves elongated 5-7, 3-6 and 2-3 cm per day in the control tank and in the 13 and 25 cm ulvoid canopy tanks, respectively. The difference between the initial and final (after 30 days) carbon contents in eelgrass leaves and rhizomes in the control tank was not significant, but that in the 25 cm ulvoid canopy height tank was significant. The carbon content in eelgrass 25 cm ulvoid canopy height tank was lower than that in the control tank (without ulvoid).