Technical Abstract: Eutrophication of coastal waters often leads to excessive growth of microalgal epiphytes attached to seagrass leaves; however, the effect of increased nutrient levels on sediment microalgae has not been studied within seagrass communities. A slow-release NPK Osmocote fertilizer was added to sediments within and outside beds of the shoal grass Halodule wrightii Ascherson, in Big Lagoon, Perdido Key, FL. Gross primary production (GPP) and biomass (HPLC photopigments) of sediment microalgae within and adjacent to fertilized and control H. wrightii beds were measured following two 4 week enrichment periods during June and July 2004. There was no effect of position on sediment microalgal GPP or biomass in control and enriched plots. However, nutrient enrichment significantly increased GPP in both June and July, whereas sedimentary chlorophyll a and fucoxanthin (proxies of total microalgal and diatom biomass, respectively) increased only during the June enrichment period. These results suggest that sediment microalgae could fill some of the void in primary production where seagrass beds disappear due to excessive nutrient enrichment.