Sedimentation and overfishing are important local stressors on coral reefs that can independently result in declines in coral recruitment and shifts to algal-dominated states. However, the role of herbivory in driving recovery across environmental gradients is often unclear. Here we investigate early successional benthic communities and coral recruitment across a sediment gradient in Palau, Micronesia over a 12-month period. Total sedimentation rates measured by 'TurfPods' varied from 0.03 ± 0.1 SE mg cm-2 d-1 at offshore sites to 1.32 ± 0.2 mg cm-2 d-1 at inshore sites. To assess benthic succession, three-dimensional settlement tiles were deployed at sites with experimental cages used to exclude tile access to larger herbivorous fish. Benthic assemblages exhibited rapid transitions across the sediment gradient within three months of deployment. At low levels of sedimentation (less than 0.6 mg cm-2 d-1), herbivory resulted in communities dominated by coral recruitment inducers (short turf algae and crustose coralline algae), whereas exclusion of herbivores resulted in the overgrowth of coral inhibitors (encrusting and upright foliose macroalgae). An 'inducer threshold' was found under increasing levels of sedimentation (greater than 0.6 mg cm-2 d-1), with coral inducers having limited to no presence in communities, and herbivore access to tiles resulted in sediment-laden turf algal assemblages, while exclusion of herbivores resulted in invertebrates (sponges, ascidians) and terrestrial sediment accumulation. A 'coral recruitment threshold' was found at 0.8 mg cm-2 d-1, below which net coral recruitment was reduced by 50% in the absence of herbivores, while recruitment was minimal above the threshold. Our results highlight nonlinear trajectories of benthic succession across sediment gradients and identify strong interactions between sediment and herbivory that have cascading effects on coral recruitment. Local management strategies that aim to reduce sedimentation and turbidity and manage herbivore fisheries can have measurable effects on benthic community succession and coral recruitment, enhancing reef resilience and driving coral recovery.