In many terrestrial seeds, photosynthetic activity supplies O₂ to the developing plant embryo to sustain aerobic metabolism and enhance biosynthetic activity. However, whether seagrass seeds possess similar photosynthetic capacity to alleviate intra-seed hypoxic stress conditions is unknown. We used a novel combination of microscale variable chlorophyll fluorescence imaging, a custom-made O₂ optode microrespirometry system and planar optode O₂ imaging, to determine the O₂ microenvironment and photosynthetic activity in developing seeds and seedlings of seagrass (Zostera marina). Developing, sheath-covered seeds exhibited high O₂ concentrations in the photosynthetic active seed sheath and low O₂ concentrations in the centre of the seed at the position of the embryo. In light, photosynthesis in the seed sheath increased O₂ availability in central parts of the seed enabling enhanced respiratory energy generation for biosynthetic activity. Early-stage seedlings also displayed photosynthetic capacity in hypocotyl and cotyledonary tissues, which may be beneficial for seedling establishment. Sheath O₂ production is important for alleviating intra-seed hypoxic stress, which might increase endosperm storage activity, improving the conditions for successful seed maturation and germination.