Shallow coastal and estuarine habitats play an essential role in the life cycles of many fish species, providing spawning, nursery, feeding, and migration areas. However, these ecologically valuable habitats are increasingly threatened by anthropogenic activities, causing substantial changes in both habitat availability and quality. Fish species use these shallow coastal habitats and estuaries during various life stages, leading to their categorization into guilds based on how and when they rely on these areas. This differential functional use of estuaries means that changes to these habitats may affect each guild differently. To understand the impact of estuarine habitat degradation on fish populations, it is therefore necessary to consider the full life cycle of fish and when they rely on these coastal habitats. Here, we use conceptual size-structured population models to study how estuarine habitat degradation affects two functionally different guilds. We use these models to predict how reduced food productivity in the estuary affects the demographic rates and population dynamics of these groups. Specifically, we model estuarine residents, which complete their entire life cycle in estuaries, and marine estuarine-dependent species, which inhabit estuaries during early life before transitioning offshore. We find that total fish biomass for both guilds decreases with decreasing food productivity. However, the density of juveniles of the marine estuarine-dependent guild can, under certain conditions, increase in the estuary. This occurs due to a shift in the population biomass distribution over different life stages and a simultaneous shift in which life stage is most limited by food. At the individual level, somatic growth of juveniles belonging to the estuarine-dependent guild decreased with lower food supply in the estuary, due to increased competition for food. The somatic growth rates of fish belonging to the resident guild were largely unaffected by low food supply, as the total fish density decreased at the same time and therefore the per-capita food availability was similar. These outcomes challenge the assumption that responses to habitat degradation are similar between fish guilds. Our study highlights the need to assess not only fish biomass but also size distributions, survival, and somatic growth rates for a comprehensive understanding of the effects of habitat degradation on fish populations. This understanding is crucial not only for estuary fish communities but also for successful conservation and management of commercially harvested offshore population components.