Size-specific mortality can determine whether coral transplants become successfully established in a reef rehabilitation effort. Presented here are results of a study of size-specific mortality in laboratory-cultured transplants, and the mediating effect of fusion on their survival and growth. Culturing seeded colonies for transplantation minimizes impacts to source reefs. This strategy provides an opportunity to enhance survival of a transplanted population by incorporating selected aspects of colonial modular biology, such as fusion, into the culture phase. Despite efforts to develop a completely field-based method, settlement and early survival of juveniles of the scleractinian Pocillopora damicornis were much higher in laboratory aquaria than among those settled on reef substrate, highlighting the difficulty of direct seeding and justifying the higher effort involved in laboratory rearing. Juvenile colonies from four size cohorts (≤3 mm, 3.1–6 mm, 6.1–10 mm, and 10.1–29 mm), outplanted to a reef in August 1997, showed one-year survival of 0%, 2.5%, 16.3%, and 47.5%, respectively, illustrating significant size-specific mortality. Colony fusion resulted in lower 6-mo mortality (unfused colonies: 34.5% ± 0.4%, fused pairs: 14.0% ± 2.5%, fused groups: 8.3% ± 4.8%; means ± 1 se), and chimeras of >2 fused colonies produced polyps faster. Tissue necrosis along fusing colony borders was observed between 8-mo-old colonies. This suggested a rejection response, though colonies fusing prior to this age remained stable for up to one year. A transition matrix revealed that fused colonies showed greater probability of growth to the next size class, while unfused colonies showed higher mortality and stasis. Growth trajectories based on transition probabilities suggested that fused colonies would reach reproductive size much earlier than unfused colonies. To test the hypothesis that larvae aggregatively settle to increase their chances of fusing, settlement patterns were determined in larvae of same- vs. mixed-parent groups. Settled larvae were aggregatively distributed, with no difference in aggregation strength in larvae of same- vs. mixed-parent groups. Results suggest a benefit of fusion to survival and growth within the first eight months in juvenile coral colonies. Fusion could be used as a strategy to obtain larger colonies faster, provided they remain stable over time. Laboratory seeding and rearing of juveniles to 10 mm provides a workable alternative to fragment transplantation in brooding coral species, and similar strategies may also be developed for spawning species.