Sydney rock oysters (SRO) Saccostrea glomerata suffer mass mortalities during summer and autumn as a result of infection by a protozoan parasite Marteilia sydneyi (QX disease). Mass selected disease resistant (QXR) lines have been used with some success in affected estuaries in recent years, with resistance attributed to oxidative defense systems. However, the role of hemocytes in resistance to QX by SRO has not been fully explored. In the present study, fifty QXR and fifty wild caught (WC) oysters were collected from a lease at Pimpama River during a QX outbreak in January 2011. Hemocytes characteristics (type, morphology) and functions (mortality, phagocytosis and oxidative activity) from both oyster lines were analyzed by flow cytometry in the context of infection intensity and parasite viability (determined histologically). Amongst the QXR oysters, 20% were diseased containing viable parasite, 74% had killed M. sydneyi and 6% were uninfected. In contrast, 86% of WC oysters were diseased, 2% had killed M. sydneyi and 12% were healthy. Significant differences in hemocyte number and physiology between the two oyster lines were found (ANOVA). Phagocytosis rate and the mean oxidative activity per cell were similar between both oyster lines. Higher numbers of infiltrating and circulating hemocytes, higher percentage of circulating granulocytes, their higher size and complexity in QXR oysters, and the production of reactive oxygen species were associated with the ability to kill the parasite. High abundance of M. sydneyi in the digestive tubule epithelium of both oyster lines implied inability to kill the parasite at the beginning of the infection. However, QXR oysters had the ability to kill M. sydneyi at the stage of sporangiosorae in the epithelium of digestive tubules. The similar phagocytic ability of hemocytes from both oyster lines, the size of the parasite at this infection stage, and its localization suggested that encapsulation is likely to be the main process involved in the eradication of M. sydneyi by QXR oysters.