Seahorse Key was the site a watchtower erected in 1801 by followers of William Augustus Bowles, self-designated Director General of the State of Muskogee, an attempt to set up an independent state in the western part of East Florida.

At that time the Federal government reserved several of the islands in the Cedar Keys archipelago for military use.

At the beginning of the American Civil War Confederate sympathizers extinguished the light.

Federal troops occupied Seahorse Key in 1862, and used it as a prison for the duration of the war.

The University of Florida has leased 3.2 acres (1.3 ha) of the wildlife refuge, including the lighthouse, for use as a marine laboratory since 1952.