Spatial patterns of settlement and abundance of older life stages were examined for three species of damselfish in the genus Dascyllus by monitoring natural colonization of standard amounts of initially empty juvenile microhabitat (anemones for D. trimaculatus; branching coral for D. flavicaudus and D. aruanus) transplanted to a series of sites within lagoons of Moorea, French Polynesia. Large spatial differences in larval colonization were observed, which were temporally consistent but different among the species. At the whole-island scale, D. trimaculatus settled primarily on the northern shore, while settlement of the other two species was greatest at the southern end. The three species also showed different patterns of settlement within lagoons: D. aruanus settled mainly nearer to shore, D. flavicaudus primarily on offshore lagoon portions and D. trimaculatus colonized equally across the lagoons. Among sites around the island, the relative abundance of older juveniles after 10 months was a curvilinear function of the relative abundance of settlers for two species (D. trimaculatus and D. flavicaudus). There was no relationship between patterns of settlement and abundance of older juveniles for D. aruanus, although juvenile abundance was inversely related to that of juvenile D. flavicaudus. At the within-lagoon scale, settlement mirrored almost exactly the relative abundance of older lifestages of D. trimaculatus and D. flavicaudus, whereas there was just a qualitative match for D. aruanus. A competition experiment revealed that juvenile D. flavicaudus had a greater effect on population growth of D. aruanus than vice versa, and this mechanism helped explain why the modification of settlement patterns was greatest in D. aruanus. Interspecific variation in abundance of older stages was shaped to differing extents by both patterns of larval delivery and subsequent density-dependent processes involving competition for shelter space.