It has been postulated that mound-building callianassid shrimp and seagrass have mutually negative effects on each other. On reef flats in the Spermonde Archipelago, Indonesia, sediment mounds of callianassid shrimp are rare in wave exposed seagrass meadows, occur frequently in sheltered seagrass meadows, and reach their highest densities (4.2 mounds m− 2) in unvegetated subtidal areas. There sediment turnover is high at an estimated 3408 g DW m− 2 ∗ d− 1. Based on collected specimens and burrow casts, the most important bioturbators are Glypturus armatus within seagrass beds and Neocallichirus vigilax in unvegetated subtidal areas. Six shrimp exclusion, six control and six zero treatment plots were set up in an unvegetated subtidal N. vigilax bed. Half of the plots for each treatment were ca. 1.5 m (“shallow”) and the other half ca. 2 m or slightly more (“deep”) below spring low tide level. The survival of transplanted shoots of the six seagrass species Enhalus acoroides, Thalassia hemprichii, Cymodocea rotundata, Halodule uninervis, Syringodium isoetifolium and Halophila ovalis was monitored over 27 months. At the end, E. acoroides had survived in about half of the plots with no obvious relation to either treatment or water depth. C. rotundata and H. uninervis had successfully established themselves on the shallowest exclusion plot only, and had disappeared from all other plots. T. hemprichii and S. isoetifolium had disappeared from all plots. H. ovalis expanded rapidly in the dry seasons, but wet seasons caused a temporary decline in shoot numbers. At the end, the highest shoot numbers were counted in shallow exclusion plots, some shoots survived in deep exclusion plots and the species disappeared from all deep control and zero treatment plots. H. ovalis shoot numbers were significantly influenced by water depth (ANOVA p < 0.01) and, to a lesser extent, by treatment (ANOVA p < 0.05) but there was no interaction between the two factors. It is concluded that seagrasses are only controlled by shrimp bioturbation at the lower limit of their distribution in sheltered subtidal areas. Here they are already under considerable stress from a combination of factors such as light limitation and sedimentation. However, the distribution pattern of seagrasses vs. shrimp elsewhere on the islands suggests that seagrasses are equal competitors in sheltered intertidal areas, where they may even profit from the abundant small tidal pools between mounds created by the shrimp, and dominant competitors in exposed intertidal and subtidal areas.