The seagrass Thalassia testudinum is the dominant habitat-builder in coastal reef lagoons of the Caribbean, and provides vital ecosystem services including coastal protection and carbon storage. We used a remote sensing methodology to map T. testudinum canopies over 400 km of coastline of the eastern Yucatán Peninsula, comparing the depth distribution of canopy density, in terms of leaf area index (LAI), to a previously established ecological model of depth and LAI for this species in oligotrophic conditions. The full archive of Sentinel-2 imagery from 2016 to 2020 was applied in an automated model inversion method to simultaneously estimate depth and LAI, covering ∼900 km2 of lagoon with approximately 800 images. Data redundancy allowed for statistical tests of change detection. Achieved accuracy was sufficient for the objectives: LAI estimates compared to field data had mean absolute error of 0.59, systematic error of 0.04 and r2 > 0.67 over a range of 0–5. Bathymetry compared to 46,000 ICESat-2 data points had a mean absolute error of 1 m, systematic error less than 0.5 m, and r2 > 0.88 over a range of 0–15 m. The estimated total area of seagrass canopy was consistent with previously published estimates of ∼580 km2, but dense canopies (LAI > 3), which are the primary contributors to below-ground carbon storage, comprise only ∼40 km2. Within the year-to-year variation there was no change in overall seagrass abundance 2017–2020, but localised statistically significant (p < 0.01) patches of canopy extension and retraction occurred. 2018 and 2019 were affected by beaching of pelagic Sargassum and dispersion as organic matter into the lagoon. The multi-year analysis enabled excluding this influence and provided an estimate of its extent along the coast. Finally, the distribution of LAI with depth was consistent with the ecological model and showed a gradient from north to south which mirrored a well-established gradient in anthropogenic pressure due to touristic development. Denser canopies were more abundant in developed areas, the expected growth response to nutrient enrichment. This increase in canopy density may be a useful early bio-indicator of environmental eutrophication, detectable by remote sensing before habitat deterioration is observed.