Coastal and estuarine ecosystems are highly susceptible to crude oil pollution. Therefore, in order to examine the resilience of benthic phototrophs that are pivotal to coastal ecosystem functioning, we simulated an oil spill in tidal mesocosms consisting of intact sediment cores from a mudflat at the mouth of the Colne Estuary, UK. At day 21, fluorescence imaging revealed a bloom of cyanobacteria on the surface of oiled sediment cores, and the upper 1.5 cm thick sediment had 7.2 times more cyanobacterial and 1.7 times more diatom rRNA sequences when treated with oil. Photosystem II operating efficiency (Fq′/Fm′) was significantly reduced in oiled sediments at day 7, implying that the initial diatom-dominated community was negatively affected by oil, but this was no longer apparent by day 21. Oil addition significantly reduced numbers of the key deposit feeders, and the decreased grazing pressure is likely to be a major factor in the increased abundance of both diatoms and cyanobacteria. By day 5 concentrations of dissolved inorganic nitrogen were significantly lower in oiled mesocosms, likely resulting in the observed increase in nifH-containing, and therefore potentially dinitrogen-fixing, cyanobacteria. Thus, indirect effects of oil, rather than direct inhibition, are primarily responsible for altering the microphytobenthos.