Seagrasses serve an important function in the ecology of Florida Bay, providing critical nursery habitat and a food source for a variety of organisms. They also create significant benthic structure that induces drag, altering local hydrodynamics that can influence mixing and nutrient dynamics. Thalassia testudinum seagrass meadows were investigated to determine how shoot density and morphometrics alter local wave conditions, the generation of turbulence, and fluid exchange above and within the canopy. Sparsely vegetated and densely vegetated meadows were monitored, with shoot densities of 259 ± 26 and 484 ± 78 shoots m−2, respectively. The temporal and spatial structure of velocity and turbulence were measured using acoustic Doppler velocimeters and an in situ particle image velocimetry (PIV) system positioned both above and within the seagrass canopy. The retention of fluid within the canopy was determined by examining e-folding times calculated from the concentration curves of dye plumes released within the seagrass canopy. Results show that a shear layer with an inflection point develops at the top of the seagrass canopy, which generates instabilities that impart turbulence into the seagrass meadow. Compared to the overlying water column, turbulence was enhanced within the sparse canopy due to flow interaction with the seagrass blades, but reduced within the dense canopy. Wave generated oscillatory motion penetrated deeper into the canopy than unidirectional currents, enhancing fluid exchange. Both shoot density and the relative magnitude of wave- versus current-driven flow conditions were found to be important controls on turbulent exchange of water masses across the canopy-water interface.