Eelgrass is the most widespread plant in temperate coastal waters. It is regarded as a useful indicator of water quality because water clarity regulates its extension towards deeper waters, i.e. the depth limit. This study analyses the use of eelgrass depth limits as a bioindicator under the Water Framework Directive (WFD). The WFD demands that ecological status is classified by relating the actual level of bioindicators to a so-called 'reference level', reflecting a situation of limited anthropogenic influence. The directive further demands that reference levels are defined for 'water body types' with similar hydromorphological characteristics, and that the classification thereby becomes 'type-specific'. A large historic data set on depth limits of eelgrass around 1900 was used to characterise reference levels, and a large data set from the Danish National Monitoring and Assessment Programme to characterise actual depth limits. Data represented a wide range of Danish coastal water bodies that were grouped into 10 water body types based on differences in salinity and water depth. The analyses clearly illustrate that the definition of ecological status classes markedly influence the assessment of ecological status according to the WFD. Moreover, the study demonstrates that the use of type-specific classification implies a risk of misinterpreting ecological status. Classification problems were pronounced in spite of a unique data material on reference conditions, and the problems are likely to be even greater in cases where reference conditions are less well defined. A more robust classification was obtained by using reference levels for individual sites in a site-specific classification. In conclusion, when classifying water quality on the basis of eelgrass depth limits, site-specific reference levels are recommended if such data are available. If more general information on reference levels is used, local conditions known to affect depth limits must be taken into account.