The southern continental margin of Australia, the largest area of cool-water carbonate sedimentation on the globe, is characterized by extensive marine grassbeds in many inshore environments. The most important seagrasses in terms of calcareous epiphyte production are Posidonia sinuosa, P. angustifolia, P. australis, Amphibolis antarctica and A. griffi thii. The predominant control on relative abundance of calcareous epiphytes is seagrass biomass. These grasses have a biomass of 50-500 g m 2 , which peaks at 2-4 m water depth. The most abundant calcareous epiphytes are geniculate (articulated) and non-geniculate (encrusting) coralline algae that together comprise ~38-80% of the epiphyte carbonate. The only other signifi cant epiphytes are bryozoans and benthic foraminifera, which contribute roughly equal amounts (~8-33% each) of carbonate. Unlike the seagrass biomass, calcareous epiphyte abundance peaks at water depths of ~10 m. The rates of epiphyte production are roughly similar to those from epiphytes in tropical environments, averaging 210 26 g m 2 yr 1 . Posidonia is morphologically similar to tropical seagrasses (e.g. Thalassia) and produces largely carbonate mud from the disintegration of blade-encrusting corallines. Amphibolis, on the other hand, has an extensive upright, exposed shoot system that is much longer lived (biennial) and so is encrusted with prolifi c articulated corallines thus producing ~3 more carbonate in terms of g kg 1 from the stems than the blades. Average accumulation rates of epiphytic carbonate are calculated to be ~7.4 cm kyr 1 . This accounts for a major proportion of the carbonate sequestered in grass beds in this cool-water realm, and probably accounts for much of the nearshore and supratidal carbonate mud. Thus, the nearshore, grass-covered habitat is a cool-water carbonate factory surprisingly similar to the shallow-water tropical system, except that the sediment produced is poorly sorted Mg-calcite carbonate with little or no aragonite.