Eelgrass habitats are among the most productive and biologically diverse ecosystems on the planet. Living and dead plant material, including leaves, roots and rhizomes, has many valuable ecological functions such as stabilizing seafloor sediments and shorelines, cleaning coastal waters, providing habitat for a diversity of flora and fauna, and supporting the foundation of the detrital food web.
As food, eelgrass has far-reaching effects. Because it is a primary producer, it forms the base of a food web. Its main function as food is to produce detritus, or decaying plant matter, which is consumed by a diversity of creatures such as bacteria, worms, and crabs. These detritivores in turn are preyed upon by larger predators such as fishes. Detritus is also carried offshore where it is fed upon by animals deep below the ocean's surface. As detritus, eelgrass is critical to coastal food webs and connects coastal and offshore ecosystems.

A diverse assemblage of animals inhabits eelgrass beds. Eelgrass creates a complex underwater habitat which acts as refuge and feeding ground for many animals and is particularly valuable as nursery habitat. Animals swim or walk among the leaves, burrow in the sediments around the roots and rhizomes, and colonize the floating leaves. The economic value of eelgrass habitat is demonstrated by the abundance and diversity of commercially and recreationally important species, such as summer flounder, winter flounder, weakfish, blue crabs, bay scallops, lobsters, striped bass, and blue mussels (to name a few), that require eelgrass at a point of life history. Many other species (e.g., sea anemones, shrimps, worms, snails, etc.) that live in eelgrass habitat are fundamental components of the diet of commercially valuable species. Birds, specifically waterfowl, feed extensively ‚ and at times exclusively ‚ in eelgrass beds because of the diversity and abundance of prey species in this productive habitat.
Eelgrass also helps prevent erosion and maintain shoreline stability by anchoring seafloor sediment with its spreading roots and rhizomes. Its leaves, floating in the water column, slow water flow, which promotes deposition of suspended particles and stabilization of sediments. In addition, eelgrass filters pollutants such as nutrients from the water column. This, in turn, increases primary productivity through increased photosynthesis in clearer water. Specifically, shoreline erosion caused by storms and wave energy is substantially dampened in areas with productive eelgrass beds and thus protects adjacent coastal properties.
Eelgrass has historically been used for a variety of human needs such as food, basket weaving, compost, bedding, insulation and high-grade paper. Most industries stopped processing eelgrass in 1930-31 when the Wasting Disease nearly wiped out eelgrass populations along the Atlantic Coast of North America and Europe.
Eelgrass supports several commercial fisheries by providing structure, shelter, and foraging habitat in mud flats, mixed sediment or sand flat environments. American lobsters, blue mussels, soft-shell clams, razor clams, blood worms, sand worms, rock crabs, sand shrimp, periwinkles, and winter flounder all benefit from eelgrass beds. Eelgrass contributed to seafood landings in 1997 valued at over $153 million.