1. Seagrass meadows are important global ‘blue carbon’ sinks. Despite a 30% loss of seagrasses globally during the last century, there is limited empirical research investigating the effects of disturbance and loss of seagrass on blue carbon stocks. 2. In this study, we hypothesised that seagrass loss would reduce blue carbon stocks. Using shading cloth, we simulated small-scale die-offs of two subtropical seagrass species, Halodule wrightii and Thalassia testudinum, in a dynamic northern Gulf of Mexico lagoon. The change in quantity and quality of sediment organic matter and organic carbon were compared among kill, control and bare plots before the kill treatment, shortly after the kill treatment and 11 months after the kill treatment. 210 Pb age dating was performed on bare and Thalassia plots at 11 months to evaluate the impact of sediment erosion in the absence of vegetation. 3. The small-scale die-off led to a 50-65% organic matter (OM) loss in the sediment in the top 8 cm of Halodule plots. Thalassia plots lost significant portions OM (50%) and organic carbon (C; 21-47%) in only the top 1 cm of sediment. The 210 Pb profiles indicated Thalassia die-off reduced the C sequestration rate by 10%, in addition to a loss of ~1 years’ worth of C stocks (~22 g m-2<). Furthermore, analyses on O Morg quality indicated a loss of labile OM/C and enhanced remineralisation by microbes. 4. Synthesis and applications: This study provides empirical evidence that small-scale shading-induced seagrass die-offs can reduce seagrass carbon sequestration capacity and trigger losses of blue carbon stocks. While the losses recorded here are modest, these losses in blue carbon storage capacity are notable due to the proximity of shading structures (for example, boat docks) to seagrass habitats. Thus, policies to avoid or protect seagrass habitats from common small-scale, shading disturbances are important for optimising both carbon sequestration capacity and coastline development and management.17-Nov-2017