During the summer of 1995, we investigated the response of mud crab megalopae (Panopeus herbstii Milne-Edwards) to cues associated with adult habitat. Natural rock/shell substratum and the rock-associated seaweed, Fucus vesiculosus L., both induced metamorphosis of competent megalopae; natural sand substratum did not induce metamorphosis. Structural mimics of preferred substrata induced metamorphosis only when covered with natural biofilm. Clean mimics did not induce metamorphosis. Water-soluble exudates from preferred substrata showed weak induction of metamorphosis. Exudates from adult P. herbstii elicited a similar weak response. Exudates from another species of crab and from two fish predators did not induce metamorphosis. We conclude that water-soluble cues associated with major components of preferred adult habitat induce the metamorphic molt of P. herbstii megalopae. The three-dimensional structure of the substratum is not important in induction of metamorphosis, but the biofilm associated with preferred substratum plays a critical role. It is not clear whether the biofilm produces the water-soluble cue or simply provides a tactile stimulus that works in conjunction with the soluble cue.