California rice (Oryza sativa L.) production has been recently challenged by the early-season nuisance algae blooms. The algal community in rice is a complex of green algae (Nostoc spongiforme Agardh ex Bornet) and cyanobacteria species that can develop a thick algal mat on the surface of the water and interfere with the emergence and establishment of rice seedlings. The objective of this research was to determine the impact of algal infestation level on rice seedling emergence. A mesocosm study was conducted in 57-L tubs. Three levels of algal infestation (low, medium, and high) were produced by adding fertilizer (N:P) into the tubs at 0:0, 75:35, and 150:70 kg−1 ha. Sixty rice seeds (‘M-206’) were soaked for 24 h and spread into tubs filled with water. Photosynthetic active radiation (PAR), chlorophyll a concentration as the quantitative measure of algae, number of emerged rice seedlings, and their dry biomass were studied during the experiment. Results showed that algal infestation can directly change the amount of light received into the water. Minimum, maximum, and mean percentage of PAR inside the water declined as the algal infestation level increased. As a consequence, rice seedling emergence dropped under the high algal pressure. At very high algal infestation (i.e., chlorophyll a concentration of above 500 µg ml−1), rice seedling emergence was reduced up to 90%. Furthermore, rice seedling emergence was delayed under algal infestation. When algal infestation was low, time to 50% rice seedling emergence (t50) ranged between 5 and 10 d, while at high algal infestation, t50 ranged between 12 and 20 d. Moreover, individual rice seedling biomass was reduced from 1 g to 0.01 g as algal infestation increased. The results from this study indicate that uncontrolled algae at the beginning of the rice-growing season could reduce rice seedling emergence, establishment, and rice stand. Given that algal infestation in fields has a patchy pattern, loss of rice stand in these patches could provide empty niches for other weeds to grow.