Since it was introduced to Zanzibar (Tanzania), seaweed farming has significantly contributed to local, socio-economic development. However, several investigations have shown impacts on the coastal environment near where the farms are located. As many seaweed farms are located on seagrass beds, there is a risk that seaweed farming could affect seagrass beds, and thereby disturb important ecosystem functions and the flow of ecological goods and services. This study compares characteristics of macrophytes (focusing on seagrasses), benthic macrofauna and sediment in seagrass beds, with and without seaweed farms, and a sand bank without vegetation in Chwaka Bay, Zanzibar. The results showed that seagrass beds underneath seaweed farms generally had less seagrass and macroalgae, finer sediment, lower sediment organic matter content and a reduced abundance and biomass of macrofauna, than seagrass beds without seaweed farms. Further, the macrofaunal community structure in seaweed farms showed more similarities to that on the sand bank than in the unfarmed seagrass beds. Most of the dissimilarity was attributable to Lucinidae (suspension-feeding bivalves), which were almost absent in the seaweed farms, resulting in the large difference in biomass between the seaweed farms and the unfarmed seagrass beds. When interpreted together with information from farmers, the observed pattern is believed to be caused by the seaweed farming activities. This indicates that more research is needed to establish the effects of seaweed farming on seagrass beds, and that more attention should be given to the location of farms and the choice of farming methods.