We studied the settlement patterns of three Caribbean coral reef fishes in three different habitat types: mangroves, seagrass beds, and coral reefs. The settlement patterns of the three species were not random and could best be explained by active habitat selection during settlement. Acanthurus bahianus preferentially settled on the shallow reef flat and in adjacent seagrass beds, Lutjanus apodus settled exclusively into mangroves, and Ocyurus chrysurus, settled into both mangroves and seagrass beds. The settlement patterns of these three species reflect their habitat utilization during later juvenile stages. This study, therefore, suggests that the higher juvenile densities in mangroves and seagrass beds are determined by habitat selection during settlement rather than by post-settlement processes. This habitat selection during settlement is in accordance with the assumed importance of mangroves and seagrass beds as juvenile habitats of coral reef fishes and underlines the pressing need for their conservation.