Macrofaunal assemblages associated with seagrass contribute to many environmental services offered by seagrasses through their biological functions. They contribute to the ecosystem health by enhancing productivity, resilience, and biodiversity through nutrient cycling, controlling epiphytes, stabilizing sediment, and supporting trophic interactions. Given this significance, it is imperative to assess the functional diversity of the seagrass-associated macrofauna (SMF). Studies on the diversity of Indian seagrasses have minimal information on the components of functional diversity. The species diversity and functional diversity of the SMF were assessed in the present study in the seagrass ecosystem of the Pulicat Lagoon, India. The diversity of SMF species in the lagoon was divided into functional units (FUs) based on five traits: morphology, size, mobility, habitat use and trophic group. A total of 57 species including chordates, molluscs, arthropods, and cnidarians make up the SMF. Species diversity of SMF was low (H' = 1.34). Functional units' categorization represented 1.39 species per FU or 71.9% (41 FUs) of the overall species richness of the lagoon. Additionally, the median functional unit diversity was low (FUH' = 1.27). The lagoon's SMF was classified as having moderate overall functional diversity (RaoQ-S = 0.54). The SMF groups exhibited varying patterns in terms of functional diversity and redundancy. There were significant positive relationships among SMF species diversity, functional unit diversity, and functional diversity. This emphasizes the critical need for seagrass ecosystem management, monitoring, and conservation strategies in the lagoon which is highlighted in this present study.