Rhodoliths are coralline red algal assemblages that commonly occur in marine habitats from the tropics to polar latitudes. They form rigid structures of high-magnesium calcite and have a good fossil record. Here I show that rhodoliths are ecosystem engineers in a high Arctic environment that increase local biodiversity by providing habitat. Gouged by boring mussels, originally solid rhodoliths become hollow ecospheres intensely colonised by benthic organisms. In the examined shelf areas, biodiversity in rhodolith-bearing habitats is significantly greater than in habitats without rhodoliths and hollow rhodoliths yield a greater biodiversity than solid ones. This biodiversity, however, is threatened because hollow rhodoliths take a long time to form and are susceptible to global change and anthropogenic impacts such as trawl net fisheries that can destroy hollow rhodoliths. Rhodoliths and other forms of coralline red algae play a key role in a plurality of environments and need improved management and protection plans.