Coastal development in Banten Bay, Indonesia, decreased seagrass coverage to only 1.5% of its surface area. We investigated the importance of seagrass as habitat for juvenile groupers (Serranidae) and snappers (Lutjanidae), by performing beam trawl hauls on a weekly basis in two seagrass locations and one mudflat area, and monthly trawl hauls in three different microhabitats (dense, mixed and patchy seagrass) in one of the seagrass locations. We studied the effects of location and microhabitat, as well as temporal patterns (diel, weekly and monthly) on the probability of occurrence and abundance of the most abundant grouper (Orange-spotted grouper, Epinephelus coioides) and snapper (Russell’s snapper, Lutjanus russellii). We found that both species were almost exclusively found in seagrass locations, with a preference for microhabitats of high complexity (dense and mixed microhabitats). L. russellii had a higher probability of catch and abundance during the night, most probably because of its ability to avoid the beam trawl during daytime sampling. In addition there was an effect of week and month on the presence and abundance of both species, but patterns were unclear, probably because of high fishing pressure on juvenile groupers and snappers by push net fishermen. Groupers and snappers mainly fed on abundant shrimps, and to a lesser extent on fish. Moreover, juveniles find protection against predators in seagrass, which confirmed the critical role of quantity and quality of seagrass areas for juvenile groupers and snappers in Banten Bay.