The deployment of engineered substrates seeded with newly settled corals is a technique being developed to increase the numbers of juvenile corals on reefs with the goal of improving reef resilience in response to climate warming. Using a hierarchical sampling design, we explored the spatial scales at which seeded coral (spat) survival and growth varied in situ and investigated the environmental drivers of seeded spat success in the southern inshore Great Barrier Reef. After 10 months, variation in spat survival and size was greatest at the smallest spatial scale (1–2 m) (27 and 11% of variation, respectively), indicating the scale at which the main drivers of post‐settlement survival and growth are occurring. Crustose coralline algae (CCA) cover on seeding units prior to deployment was a significant driver of short‐ and long‐term spat survival (22% of variation). Survival of Acropora millepora and A. muricata spat did not differ according to benthic community variation. Increasing cover of branching Acropora corals was correlated with decreased survival and the size of Montipora aequituberculata spat, although CCA cover on plugs remained the most influential factor determining survival. Interspecific variation in spat survival and size and higher survival and size in the side‐facing orientation of the seeding units suggest natural variation in response to the seeding method, warranting further experiments to refine species selection and deployment methods prior to upscaling. High within‐site variation in seeded spat survival and size highlights the need for future studies of ecological factors driving post‐settlement mortality at fine spatial scales.