The IKONOS 2 satellite was launched in late 1999 and carries the first commercial multispectral instrument to achieve 4 m spatial resolution. The cost and accuracy of using IKONOS imagery to map shallow-water marine environments is evaluated and compared directly to that using a suite of satellite and airborne instruments including Landsat Multispectral Scanner (MSS) and Thematic Mapper (TM), Satellite Pour l'Observation de la Terre (SPOT) High-Resolution Visible (HRV) multispectral and panchromatic, and Compact Airborne Spectrographic Imager (CASI). Evaluations were conducted in the Turks and Caicos Islands which are ideally suited to aquatic remote sensing because of the large areas of clear, shallow water containing a range of different habitats. Over 600 field sites were surveyed and used to define habitat categories, supervise image classification, and make an independent assessment of thematic map accuracy. For the high-resolution IKONOS imagery, pixel sizes were small enough to allow within-habitat textural information to be added to the classification. Making full use of this textural information in supervised classifications significantly improved ( P<.01) thematic map accuracy for fine-level habitat discrimination (13 classes). Although significantly ( P<.001) and almost 20% more accurate than Landsat TM, like other satellite-borne sensors, IKONOS data were unable adequately to discriminate 13 categories of coral, algal, and seagrass habitats (overall accuracy 50%). Comparison with CASI in a restricted area where only nine of these habitats were represented indicated that CASI (81% user accuracy) was significantly ( P<.01) more accurate than IKONOS (64% user accuracy). Comparisons of IKONOS, Landsat TM, and CASI along a transect in the maximally penetrating blue part of the spectrum suggest that the poor descriptive resolution of satellite sensors is partly due to loss of radiance contrast, presumably as a result of atmospheric Rayleigh scattering. Problems of scattering, coupled with the relatively poor spectral resolution of satellite sensors such as IKONOS, currently constrain their use for fine-level marine habitat mapping. IKONOS data enabled significantly more accurate mapping at a geomorphological scale (e.g., coral vs. seagrass) than other satellite sensors except Landsat TM. While reasonably high accuracies (75%) were obtained for such coarse-level habitat mapping, Landsat TM was more cost-effective than IKONOS, even for small (50 km 2) areas. IKONOS may only be a cost-effective option if (i) independent field data are available to identify habitat patches, (ii) the area to be mapped is fairly small (<500 km 2), and (iii) small-scale (<10 m) habitat dynamics are to be monitored. IKONOS data are unlikely to identify deterioration in coral reefs directly because changes in community structure cannot be resolved spectrally from the satellite.