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Summary Sediment‐stabilizing and ‐destabilizing organisms, i.e. microphytobenthos (biofilms) and macrozoobenthos (bioturbators), affect the erodibility of muddy sediments, potentially altering large‐scale estuarine morphology. Using a novel eco‐morphodynamic model of an idealized estuary, we investigate eco‐engineering effects of microphytobenthos and two macrozoobenthic bioturbators. Local mud erodibility is based on species pattern predicted through hydrodynamics, soil mud content, competition and grazing. Mud resuspension and export is enhanced under bioturbation and prevented under biostabilization through respective exposure and protection of the supra‐ and intertidal. Bioturbation decreases mud thickness and bed elevations, which increases net mud fluxes. Microphytobenthos reduces erosion, leading to a local mud increase of intertidal sediments. In multi‐species scenarios, an effective mud‐prone bioturbator strongly alters morphology, exceeding that of a more abundant sand‐prone moderate species, showing that morphological change depends on species traits as opposed to abundance. Altering their habitat, the effective mud‐prone bioturbator facilitates expansion of the sand‐prone moderate bioturbator. Grazing and species competition favor species distributions of dominant bioturbators. Consequently, eco‐engineering affects habitat conditions while species interactions determine species dominance. Our results show that eco‐engineering species determine the mud content of the estuary, which suggests large effects on the morphology of estuaries with aggravating habitat degradation., Sediment‐stabilizing and ‐destabilizing organisms alter large‐scale estuarine morphology in a novel eco‐morphodynamic model of an idealized estuary. Mud resuspension and export are enhanced under bioturbation and prevented under biostabilization through respective exposure and protection of the supra‐ and intertidal. This leads to reduced mud content and widening of the estuary under bioturbation and muddy confined morphologies under biostabilization. In multi‐species scenarios, eco‐engineering affects habitat conditions which reorganizes species distribution, while species interactions determine species dominance.