The effects of grazing on fleshy algal turfs by large herbivorous fishes and by the black spiny urchin, Diadema antillarum (Philippi), were investigated in three shallow (<3 m), moderately exposed, reef flat habitats in the San Blas Islands on the Caribbean coast of Panama. Grazing by Diadema was found to be a primary determinant of the biomass of fleshy algae in this shallow reef environment, and its impact was exposure-dependent. Feeding activity of Diadema was inhibited during the protracted periods of heavy wave action that characterize the dry season when strong north winds (24–27 kph) are typical. In the shallowest, most exposed elkhorn bluff habitats urchin grazing was minimal even during calm periods due to the effects of waves generated by unpredictable, light winds. In a relatively protected backreef habitat, water movement was inadequate to discourage grazing significantly, even during the turbulent dry season. As a result, algal biomass (decalcified dry weight) was typically three-fold greater in the elkhorn bluff habitat than on the ackreef. In habitats of intermediate exposure (elkhorn fields) algal biomass was reduced during calm periods, but increased to the level characteristic of the elkhorn bluff habitat during protracted rough periods that inhibited grazing by Diadema. A caging experiment in the backreef habitat demonstrated a relatively minor effect of grazing by herbivorous fishes in comparison to that of grazing by Diadema. Observations on the distributions and abundances of herbivorous fishes also indicated a relatively minor role for these grazers as determinants of algal biomass in the more exposed habitats.