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Abstract Jellyfish blooms are increasing globally in frequency and intensity, introducing complex ecological interactions, yet the mechanisms by which they alter ecosystem structure remain poorly characterized due to a lack of sustained field observations. We conducted targeted time‐series observations in Jiaozhou Bay, a representative coastal ecosystem experiencing an Aurelia coerulea bloom, tracking temporal responses of plankton communities and trophic interactions to fluctuations in the jellyfish population. Combining empirical modelling with field data, we further quantified the dual roles of jellyfish as top‐down predators and bottom‐up nutrient regenerators, linking bloom dynamics to changes in plankton structure and biogeochemical cycling. During high A. coerulea aggregation, the structure of the plankton changed markedly, characterized by a sharp decline in zooplankton coupled with the proliferation of phytoplankton. The top‐down feeding effect triggered potential cascading impacts, decoupling trophic pathways by weakening zooplankton‐mediated energy transfer and releasing phytoplankton from grazing pressure. Concurrently, jellyfish contributed to biogeochemical processes by releasing bioavailable ammonium and phosphate (low N/P ratio < 16), with phosphate regeneration playing a particularly critical role in stimulating primary production. Overall, this study demonstrates that jellyfish blooms act as ecological disturbances, restructuring plankton dynamics and trophic linkages and ultimately destabilizing local ecosystem functioning. Given the broad distribution and increasing prevalence of jellyfish populations, the findings underscore the need to incorporate jellyfish dynamics into coastal ecosystem‐based management, especially for predicting and indicating planktonic regime shifts. Read the free Plain Language Summary for this article on the Journal blog.