Settlement of benthic marine invertebrates is determined by the interaction between physical factors and biological processes, in which the tide, wind, and predation can play key roles, especially for species that recruit within estuaries. This complexity promotes high variability in recruitment and limited predictability of the size of annual cohorts. This study describes the settlement patterns of megalopae of the commercially important crab Cancer edwardsii at three locations (one in the center and two at the mouth of the estuary) within the Valdivia River estuary (~39.9°S), over three consecutive years (2006–2008). At each location, 12 passive benthic collectors with a natural substratum were deployed for 48 h at 7-day intervals, over a lunar cycle. Half of the collectors were covered with mesh to exclude predators. The main findings were as follows: (1) circulation changes due to upwelling relaxation or onshore winds controlled crab settlement at sites within the mouth of the estuary, (2) at the internal estuarine site, settlement was dominated by tidal effects, and (3) the effect of predation on settlement was negligible at all scales. The results show that the predominant physical factor controlling the return of competent crab larvae to estuarine environments varies spatially within the estuary. The lack of tidal influence on settlement at the mouth of the estuary can be explained by the overwhelming influence of the intense upwelling fronts and the micro-tidal regime in the study area.