Low dissolved oxygen (DO), or hypoxia, has emerged as a key threat to marine and estuarine ecosystems worldwide. While deep, offshore severe hypoxia (< 2 mg l −1 ) can cause mortality, the non-lethal impact of lower DO on the shallow nearshore (≤30 m) community is not well understood, despite the importance of the habitat for numerous species. We evaluated the sublethal influence of hypoxia on the nearshore, subtidal community of Hood Canal, Washington, USA, a seasonally hypoxic estuary. We compared 2 regions (southern impacted and northern reference) by using underwater monitoring to record weekly videos of benthic mobile species at transects at 3 depths (10, 20, and 30 m). We found the community composition was significantly different between the 2 regions; the south was primarily composed of hypoxia-tolerant invertebrates and fewer fish species compared to the northern site. Relative to other predictors, DO performed moderately well in describing the occurrence of the most abundant species. Additionally, tolerant species displayed almost a 3-fold increase in presence below a mean (± SE) DO tolerance threshold of 3.77 ± 0.27 mg l −1 , while more sensitive species declined. The magnitude in change towards more tolerant species was also greater in the south. Ultimately, comparing our findings to long-term DO trends in Hood Canal revealed the potential for a more persistent low DO state in the southern reaches. This study provides insight into the complex regional differences in community structure and potential sensitivity of nearshore communities to other perturbations in estuarine systems.