Shallow tropical lagoons at St. Croix, U.S. Virgin Islands were found to have high densities of the ghost shrimp Callianassa spp. The ecology of four species of Callianassa is discussed: C. acanthochirus, C. longiventris, C. rathbunae and C. quadracuta. The first two species capture and store in their burrows drifting detritus of seagrass and algae. The latter two species build volcano-shaped mounds of ejected sediment during feeding and burrowing. Massive quantities of sediment (up to 2.59 kg/m2/day) are funneled into subsurface galleries, gleaned for organic material and sorted. Fine grains (< 1.4 mm diam.) are then pumped back up to the surface forming mounds. Coarse-grained material (≥ 1.4 mm) such as shell debris and coral fragments are not pumped back to the surface, but are stored in many deep chambers which extend > 1.5 m below the sediment surface. In cross-section, cores from high Callianassa mound density regions show distinct alternating coarse and fine layers. This sedimentological evidence could be used as an indicator of Callianassa activity when interpreting the geological record from ancient tropical lagoonal environments.Maximum seagrass productivity and percent cover are negatively correlated (significant to p < .01) with Callianassa mound density. Experimental and control transplants of the turtle grass Thalassia testudinum into regions of high (16/m2) and low (1/m2) Callianassa mound density produced a dramatic deterioration of Thalassia within 2-4 months in high density Callianassa areas. Ejected sediment either reduces available light for photosynthesis or physically smothers Thalassia, thereby eliminating it from regions of abundant Callianassa. Because seagrass communities have such intimate energetic ties to other nearby shallow-water and deep-sea communities, the negative influence of Callianassa on seagrass beds is suspected to have second and third order effects on other tropical communities as well.