Abstract Conservation and restoration projects have emerged globally to address extensive declines in mussel reefs and the ecosystem services they provide. The success of these efforts relies on the re‐establishment of self‐sustaining populations, which requires mussels to effectively undergo every stage in their complex development cycle from larvae to adult mussels. In particular, the settlement of early life stages presents a potential bottleneck for recruitment in species like the green‐lipped mussel (Perna canaliculus) that rely on juvenile settlement onto macroalgae before they transition to a reef. However, it is largely unknown whether mussels can undergo settlement in areas after overharvesting where only remnant populations remain and natural recovery is vital. In this study, wild and transplanted macroalgae were sampled in an area with historically near‐extirpated mussel reefs (Kenepuru Sound, New Zealand) to examine the patterns of abundance of plantigrades, an early mussel life stage, in a degraded environment. The results suggest that plantigrades can settle to and survive on natural substrates following the removal of mussel reefs, but not into ecologically relevant areas. Specifically, almost no plantigrades were recorded on substrates near the sea bed, the area where almost all settlement to macroalgae would naturally occur. Instead, plantigrades were primarily recorded on macroalgae on docks suspended above the sea bed. A transplantation experiment verified this trend, demonstrating that substrates transferred to surface waters recorded a 36‐fold increase in plantigrade abundance compared with substrates near the sea bed. Turbidity was significantly higher near the sea bed than near the water surface, suggesting that high turbidity following the loss of wild mussels may be hindering natural plantigrade settlement or survival. This study identifies a potential bottleneck to natural mussel recovery and demonstrates the importance of a life cycle‐informed approach to restoration that prioritizes the removal of bottlenecks at multiple life stages.