The impact of mussel farms on the benthic environment was investigated using free-living nematode assemblages as indicators of environmental condition of the Enseada do Brito, a shallow embayment in South Brazil. The studied area is located at the State of Santa Catarina, responsible for 90% of the production of mussel farmed in the country. Samplings were carried out quarterly, from July 2004 to May 2005, below mussel ropes and at control sites located 300 m apart from the longlines. The results suggested that the mussel culture changed ecological functioning of the benthic environment at studied coastal embayment. The intense organic loads due to the biodeposition of the mussel farms, which had been in production for more than 10 years, have turned fine and well-sorted sand bottoms into a muddy deposit with significantly higher total organic content than the control. The number of nematode genera, diversity, dominance and trophic diversity were significantly lower under the mussel farms than at the control sites. The mussel farms biodeposition had also affected the temporal variability of nematode assemblages, which was detected only for samples at the control sites. The low depth and environmental energy, together with the age of the farms, were probably responsible for the observed changes in the nematode assemblages.