Abstract Marine cage culture is a popular method for rearing finfish along coastlines and plays an important role in the fish aquafarming industry. It may pose a risk of degrading the local environment by organic pollution, but local hydrographic conditions might influence the pollution at both temporal and spatial scales. In this study, the influences of marine cage culture on sedimentation, sediment physicochemical characteristics, and benthic macrofaunal assemblages were investigated during northeasterly (NE) and southwesterly (SW) monsoonal seasons at five sites along a transect from within a cage-culture area to the mouth of Magong Bay in the Penghu Islands, Taiwan. Results showed that cage culture led to significantly higher levels of sedimentation and organic loading, and organic matter-enriched sediments traveled at least 500m away from the cages in the NE monsoon season, probably due to high cage production, resuspension induced by the strong NE monsoon, and spread by wind-driven currents. Stress-tolerant polychaetes, such as members of the Cirratulidae and Capitellidae, thrived within less than 500m from the cages, cohabiting with small bivalves, Ophiuroidea, insects, and crustaceans. Additionally, densities of stress-tolerant polychaetes were positively correlated with sediment total organic matter, total nitrogen, and total organic carbon, and displayed similar distribution patterns between the monsoon seasons in 2006. Our data suggest that hydrographic regimes influenced by the NE monsoon play important roles in determining the extent and distribution of benthic environmental deterioration caused by marine cage culture in this shallow-water bay.