The role of settlement in determining the spatial and temporal patterns of mollusc settlement inside and outside of seagrass beds was examined using passive settlement traps along with benthic sampling. Settlement traps in and out of seagrass beds were sampled daily from 10 May to 30 September 1988, abridged to once every 3 days after 19 August. To examine the role of postsettlement processes in determining between-habitat differences in mollusc densities sediment cores were taken fortnightly. Mean settlement into traps located in seagrass was 1.6–2 times that into traps in nearby sand areas (5.8 bivalves · trap −1 · day −1 in grass vs. 3.6 in sand; 1.3 gastropods · trap −1 · day −1 in grass vs. 0.64 in sand). The density of gastropods inside seagrass was also higher than in sand areas (1.1 gastropods · core −1 in grass vs. 0.21 gastropods · core −1 in sand). Over the entire sampling period there was no significant difference between habitats in bivalve abundance, but density differences were significant in 3 of the first 4 fortnights. Both the settlement trap and benthic coring samples indicated a pulse of settlement of bivalves in early summer. The between-habitat difference in settlement may be the first step in determining eventual adult distributions, but more work on postsettlement processes is needed to examine processes acting between the time of settlement and adulthood.