The distribution and connectivity of marine populations are largely dependent on biophysical factors affecting pelagic larval dispersal between spawning at adult spawning sites and settlement to juvenile nursery habitats. Behaviour and swimming ability of pelagic larvae are increasingly understood to influence patterns of dispersal, but it is unclear which sensory cues are involved and when during ontogeny these abilities first develop. Here we studied the early ontogenetic development of responses to olfactory cues from coastal and estuarine waters in larvae of two temperate estuarine-associated fish species, Australian bass, Macquaria novemaculeata, and mulloway, Argyrosomus japonicus, to determine when olfaction begins to influence dispersal. Olfactory responses to habitat-associated cues were not present when larvae first transitioned from nonswimming to swimming (indicated by flexion of the notochord), but emerged after ca. 7 days in a species-specific manner that was consistent across different cohorts. Based on general additive models (GAMs), age (in days posthatch) best explained the ontogenetic pattern in both species. The emergence of chemotactic responses coincides with an exponential increase in swimming endurance reported for these species. This suggests the existence of ontogenetic milestones during larval development that, once reached, trigger active influence on dispersal. Salinity and pH did not influence choice behaviour after these ontogenetic milestones; however, the presence of cues generated by seagrass harvested from the estuary habitat elicited strong responses in fish larvae consistent with species-specific habitat preferences, indicating an important role for aquatic vegetation in driving these behaviours.