In Otago, southern New Zealand, the lugworm Abarenicola affinis resides in neighbouring tidal inlets with and without seagrass (Zostera muelleri). A comparison of abundance, body size and biomass of A. affinis between seagrass habitat (Papanui Inlet) and unvegetated habitat (Hoopers Inlet) showed little seasonal variation of these parameters in each habitat and relatively similar abundances between both habitats. In contrast, lugworm biomass was considerably lower in the seagrass habitat due to the lack of large individuals compared with unvegetated habitat. In the seagrass habitat, there was a significant negative influence of Z. muelleri below-ground biomass on abundance and biomass of A. affinis, indicating that seagrass affected lugworm burrowing and/or feeding processes. In contrast to the unvegetated habitat, where lugworms spread relatively evenly across the intertidal area, lugworms were mostly restricted to the upper intertidal zone in the seagrass habitat. The findings suggest that the extensive seagrass bed in the mid and low intertidal zones of Papanui Inlet limited lugworm distribution in an otherwise suitable habitat. Whereas small lugworms colonised seagrass areas, the largest individuals occurred only in unvegetated sediment and seemed to be more hampered by the presence of seagrass than smaller individuals. The findings highlight negative feedback between antagonistic ecosystem engineers, with the potential of seagrass physical structures (autogenic engineering) to impact negatively on lugworm activity (allogenic engineering).