In-situ macroalgal bioremediation is a promising solution for reducing excess nutrients in degraded estuaries. A critical first stage in developing macroalgal bioremediation for estuarine restoration is ensuring target species for cultivation can assimilate nutrients under relevant local conditions. The native red macroalga Gracilaria transtasmanica has been identified as a potential target for bioremediation in New Zealand estuaries. Therefore, the aim of this study was to assess the biomass productivity, photosynthetic health, and nitrogen removal of G. transtasmanica in batch cultures in winter (15.8–21.2 °C) and summer (18.6–29.9 °C) conditions under nitrogen and sediment levels representative of ambient (1 mg DIN L−1, 0.02 g sediment L−1) and extreme (10 mg DIN L−1, 0.25 g sediment L−1) conditions in estuarine habitats. Biomass productivity and total nitrogen removed were 45 and 50 % higher, respectively, in summer (0.4–4.3 g DW m−2, 6.0–30.7 mg N) compared to winter (0.6–1.8 g DW m−2, 6.1–9.1 mg N). In contrast, standardised nitrogen removal rates were higher in winter (37.8 mg N per g DW biomass growth ±0.6 S.E.) compared to summer (22.3 mg N per g DW biomass growth ±1.2 S.E.), suggesting that nitrogen uptake was independent of productivity under sub-optimal conditions. Turbidity reduced productivity in winter but increased productivity in summer. Optimal and effective quantum yields showed that the biomass was less stressed in winter, and that the functioning of photosystem II was negatively impacted during summer. These results demonstrate that G. transtasmanica can assimilate nutrients under a range of environmental conditions that are representative of both local background and high suspended sediment loads and nitrogen concentrations, and under ambient summer and winter conditions, even when biomass productivity is low. Gracilaria transtasmanica is therefore a viable target species for year-round in-situ bioremediation of nutrient-enriched estuaries.