Iodide (I⁻) retained by the brown macroalga Laminaria digitata at millimolar levels, possesses antioxidant activities, but the wider physiological significance of its accumulation remains poorly understood. In its natural habitat in the lower intertidal, L. digitata experiences salinity changes and osmotic homeostasis is achieved by regulating the organic osmolyte mannitol. However, I⁻ may also holds an osmotic function. Here, impacts of hypo- and hypersaline conditions on I⁻ release from, and accumulation by, L. digitata were assessed. Additionally, mannitol accumulation was determined at high salinities, and physiological responses to externally elevated iodine concentrations and salinities were characterised by chl a fluorometry. Net I⁻ release rates increased with decreasing salinity. I⁻ was accumulated at normal (35 S A) and high salinities (50 S A); this coincided with enhanced rETRmax and qP causing pronounced photoprotection capabilities via NPQ. At 50 S A elevated tissue iodine levels impeded the well-established response of mannitol accumulation and prevented photoinhibition. Contrarily, low tissue iodine levels limited photoprotection capabilities and resulted in photoinhibition at 50 S A, even though mannitol was accumulated. The results indicate a, so far, undescribed osmotic function of I⁻ in L. digitata and, thus, multifunctional principles of this halogen in kelps. The osmotic function of mannitol may have been substituted by that of I⁻ under hypersaline conditions, suggesting a complementary role of inorganic and organic solutes under salinity stress. This study also provides first evidence that iodine accumulation in L. digitata positively affects photo-physiology.