A generic ecosystem model has been developed for estimating the potential production of shellfish culture and the effect of that cultivation on the pelagic ecosystem in sheltered coastal waters. The model describes the dynamics of a simple food web, nutrient cycling and growth of shellfish. The design of the model is closely tied to the temporal and spatial scales that are important in determining the sustainable production level for a particular embayment. The pelagic ecosystem, mussel energetics, population dynamics and hydrodynamics are coupled to allow fully dynamic predictions of the effect of the shellfish density. When applied to Beatrix Bay, an intensive culture embayment in the Pelorus Sound of New Zealand, the model successfully captured main features of the observed system behaviour. The hydrodynamic regime of the bay controls mussel growth and production. Although high fluxes of water into the bay suppress nutrient and carbon cycling signals in the system, the model simulations demonstrated that the mussel cultivation can have considerable effects on the ecosystem of the bay including food depletion and nutrient cycling. One of the most obvious effects is nutrient enhancement through mussel excretion at low cultivation densities, which promotes primary production particularly during the N-limitation period in summer. The sensitivity analysis identified uncertainty in some parameters and indicated areas for which experimental studies could lead to model improvement. The modelling exercise has established a primary predictive tool for managing mussel aquaculture of a coastal embayment to estimate relationships between the stock level and the growth rate of mussels, and the potentially achievable harvest and stocking density.