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A state historical memorial was established for the island in the 1900s (the Florida Park Service managed the state's historic memorials). The structure is part of the Cedar Keys Historic and Archaeological District added to the National Register of Historic Places in 1989.

The lighthouse, which was 75 feet above sea level and visible for 15 miles, was first exhibited on August 1, 1854. The light station was later abandoned in 1915.

In the first half of the 1800s, it was used as a hospital and detention center during the Second Seminole War. From July 1841 until December 1842, Seahorse Key was the site of Cantonment Morgan, a temporary encampment utilized as a staging area for the receiving, processing, and deploying of troops; a hospital for both military troops and Seminole Indians; and an internment camp for captured Indians waiting to be shipped west.

Seahorse Key is a former sand dune in Levy County, with an elevation of 52 feet. It was inhabited by pre-Columbian peoples as well as by Seminole Indians in the Territorial period.

Cedar Keys National Wildlife Refuge was established under the U.S. Fish and Wildlife Service in 1929 by President Herbert Hoover. In 1936, Seahorse Key was added as a part of the 13 islands comprising 762 acres of the refuge. The University of Florida entered into an agreement with the Fish and Wildlife Service in 1952 to maintain a Marine Research Laboratory on the key.