We studied the relationship between sediment nutrient enrichment and carbon sequestration, using the ratio of gross primary production to respiration (P/R), in a fishfarming impacted and an unaffected Mediterranean seagrass (Posidonia oceanica) ecosystem in the Aegean Sea, Greece. Carbon (C), nitrogen (N) and phosphorus (P) sedimentation, nutrient pools in sediment and dissolved nutrients in pore water were significantly and positively intercorrelated, indicating close linkage between sedimentation and sediment nutrient pools in seagrass meadows. C, N and P sediment pools were significantly enhanced in the impacted meadow throughout the year, even during winter when fish farming activity was low. In the impacted sediment, the increase in C and N was higher than P, reflecting a faster remineralization and uptake of P than C and N. The ecosystem P/R ratio decreased exponentially with sediment nutrient enrichment. Threshold values are given for C, N and P sedimentation rates and sediment pools, and for N and P concentrations in pore waters, after which P/R ratio in the seagrass meadow decreases below 1, indicating a shift from autotrophy to heterotrophy with sediment nutrient enrichment. Such a regime shift indicates a loss of storage capacity of the seagrass ecosystem, jeopardizing the key role of P. oceanica as a carbon sink in the Mediterranean.