Laboratory mesocosm incubations were undertaken to investigate the influence of burrowing shrimp Trypaea australiensis (marine yabby) on sediment reworking, physical and chemical sediment characteristics and nutrients in sandy sediments receiving mangrove (Avicennia marina) leaf litter. Mesocosms of sieved, natural T. australiensis inhabited sands, were continually flushed with fresh seawater and pre-incubated for 17 days prior to triplicates being assigned to one of four treatments; sandy sediment (S), sediment + yabbies (S+Y), sediment + leaf litter (organic matter; S+OM) and sediment + yabbies + leaf litter (S+Y+OM) and maintained for 55 days. Mangrove leaf litter was added daily to treatments S+OM and S+Y+OM. Luminophores were added to mesocosms to quantify sediment reworking. Sediment samples were collected after the pre-incubation period from a set of triplicate mesocosms to establish initial conditions prior to the imposition of the treatments and from the treatment mesocosms at the conclusion of the 55-day incubation period. Yabbies demonstrated a clear effect on sediment topography and leaf litter burial through burrow creation and maintenance, creating mounds on the sediment surface ranging in diameter from 3.4 to 12 cm. Within S+Y+OM sediments leaf litter was consistently removed from the surface to sub-surface layers with only 7.5% ± 3.6% of the total mass of leaf detritus added to the mesocosms remaining at the surface at the end of the 55-day incubation period. Yabbies significantly decreased sediment wet-bulk density and increased porosity. Additionally, T. australiensis significantly reduced sediment bio-available ammonium (NH4+bio) concentrations and altered the shape of the concentration depth profile in comparison to the non-bioturbated mesocosms, indicating influences on nutrient cycling and sediment-water fluxes. No significant changes for mean apparent biodiffusion coefficients (Db) and mean biotransport coefficients (r), were found between the bioturbated S+Y and S+Y+OM mesocosms. The findings of this study provide further evidence that T. australiensis is a key-species in shallow intertidal systems playing an important role as an ‘ecosystem engineer’ in soft-bottom habitats by significantly altering physical and chemical structures and biogeochemical function.