AbstractCoastal marine habitats continue to be degraded, thereby compelling large‐scale restoration in many parts of the world. Whether restored habitats function similarly to natural habitats and fully recover lost ecosystem services is unclear. In estuaries, oyster reefs have been degraded by multiple anthropogenic activities including destructive fishing practices and reduced water quality, motivating restoration to maintain oyster fisheries and other ecosystem services, often at relatively high cost. We compared fish and invertebrate communities on recently restored (0–1 year post‐restoration), older restored (3–4 years post‐restoration), and natural oyster reefs to determine if and when restored reefs support functionally similar faunal communities. To test the influence of landscape setting on the faunal communities, the restored and natural reefs, as well as a control without reef present, were distributed among three landscapes (on the edge of salt marsh away from seagrass [salt marsh landscape], on mudflats [mudflat landscape], and near to seagrass and salt marsh [seagrass landscape]). Oyster density and biomass were greatest on restored reef habitat, as were those of non‐oyster bivalve species. Total abundance of invertebrates was much greater on oyster reefs than in control plots, regardless of reef or landscape type, yet were frequently highest on older restored reefs. Meanwhile, juvenile fish densities were greatest on natural reefs, at intermediate densities on older restored reefs, and least abundant on controls. When comparing the effects of reef age and landscape setting, juvenile fish densities were greatest on younger reefs within the mudflat landscape. Collectively, these results indicate that oyster reefs harbor higher densities of resident invertebrate prey, which may explain why reef habitat is also important for juvenile fish. Laboratory and field experiments supported the notion that gag grouper (a predatory demersal fish) forage more effectively on oyster reefs than on unstructured mud bottom, whereas our experiments suggest that flounders that utilize oyster reefs likely forage on adjacent mud bottom. Because landscape setting influenced fish and invertebrate communities on restored reefs, the ecological consequences of landscape setting should be incorporated into restoration decision making and site selection to enhance the recovery of ecosystem goods and services.