The Hiraiso Formation of northeast Japan represents an important and under-explored archive of Early Triassic marine ecosystems. Here, we present a palaeoecological analysis of its benthic faunas in order to explore the temporal and spatial variations of diversity, ecological structure and taxonomic composition. In addition, we utilise redox proxies to make inferences about the redox state of the depositional environments. We then use this data to explore the pace of recovery in the Early Triassic, and the habitable zone hypothesis, where wave aerated marine environments are thought to represent an oxygenated refuge. The age of the Hiraiso Formation is equivocal due to the lack of key biostratigraphical index fossils, but new ammonoid finds in this study support an early Spathian age. The ichnofossils from the Hiraiso Formation show an onshore-offshore trend with high diversity and relatively large faunas in offshore transition settings and a low diversity of small ichnofossils in basinal settings. The body fossils do not, however, record either spatial or temporal changes, because the shell beds represent allochthonous assemblages due to wave reworking. The dominance of small burrow sizes, presence of key taxa including Thalassinoides, Rhizocorallium and Holocrinus, presence of complex trace fossils, and both erect and deep infaunal tiering organisms suggests that the benthic fauna represents an advanced stage of ecological recovery for the Early Triassic, but not full recovery. The ecological state suggests a similar level of ecological complexity to late Griesbachian and Spathian communities elsewhere, with the Spathian marking a globally important stage of recovery following the mass extinction. The onshore-offshore distribution of the benthic faunas supports the habitable zone hypothesis. This gradient is, however, also consistent with onshore-offshore ecological gradients known to be controlled by oxygen gradients in modern tropical and subtropical settings. This suggests that the habitable zone is not an oxygenated refuge that is only restricted to anoxic events. The lack of observed full recovery is likely a consequence of a persistent oxygen-limitation (dysoxic conditions), hot Early Triassic temperatures and the lack of a steep temperature/water-depth gradient within the habitable zone.