Human activities are causing a global loss of plant and animal species, degrading ecosystem properties and threatening ecosystem services. One indicator of these losses is the increasing proportion of fish stocks in decline, and the Challenger oyster fishery in Tasman Bay, central New Zealand is an example of one such fishery. Anthropogenic effects from land-based activities, and towed-gear fishing have been implicated as contributors to the decline of shellfisheries and degradation of the marine ecosystem in Tasman Bay. Increased sedimentation in the bay caused by soil erosion and runoff associated with forestry, agriculture and subdivision is likely to have a range of negative effects on the benthic community. Also towed-gear fishing, dredging and trawling homogenise benthic habitat structure (reduce habitat heterogeneity) and facilitate sediment resuspension as well as causing removal and direct physical damage to benthic biota. There is an imperative to seek to mitigate these effects and look at ways to restore the benthic community including the commercial shellfish species. In this context, my central hypothesis was that enhancement of the benthic habitat by returning waste shell to the seabed would increase oyster production for the fishery. Related to this main goal of oyster fishery enhancement, a primary objective of the study was to fill knowledge gaps relating to the biology and ecology of the oyster in Tasman Bay. The second main topic of my thesis was to investigate how this form of habitat enhancement would alter the benthic community structure, and potentially aid in restoration of the wider ecosystem in the bay. I sought to link the twin goals of fishery enhancement and ecological restoration by considering potential management measures to promote a sustainable oyster fishery and at the same time facilitate ecological restoration within Tasman Bay. The investigations focused on four main themes: temporal patterns of oyster larval abundance, spatial patterns of spatfall and larval dispersal, effects of habitat enhancement on oyster population productivity, and effects of habitat enhancement on the benthic faunal community. Laboratory and field studies were conducted between October 2004 and May 2009. A peak period of oyster reproductive activity began in late spring and continued through summer in each year. Maximum rates of adult oysters brooding larvae were 17% in November 2004 and 2005, and 23 % in December 2006. Over the entire summer breeding period it was estimated that 55 to 78 % of adult oysters incubated larvae. A very low level of brooding activity (1 %) occurred during winter. Temporal trends in larval settlement closely tracked brooding patterns. Settlement on collectors deployed in Tasman Bay was greatest between November and January, and there were very low rates in winter. Results are useful in optimising the timing of substratum deployment in an enhancement program for the oyster fishery. Spat settlement density was strongly related to background adult oyster density. Spat settlement on experimental arrays deployed through the water column only occurred within a narrow vertical range very close to (<1 m above) the seabed. If suitable habitat is available for settlement, oysters tend to settle within a few hours after release, but approximately half of the larvae settled in a laboratory experiment were capable of remaining viable for several days. Oyster distribution assessed at the scale of the shellfishing industry’s annual biomass survey (median distance between sample tows ~ 1 km) is adequate to broadly predict spat settlement distribution in the subsequent settlement season, and the distribution of mature oysters is a key determinant in the placement of shell for habitat enhancement to maximise spat settlement. Deployment of waste whole scallop shell on the seabed as settlement substratum increased oyster spat density significantly. Available settlement surface on enhanced shell plots decreased by 82% in the five months after deployment, due to fouling by numerous invertebrates and sedimentation. Survival of oysters recruited to enhanced habitat was generally very low, and varied greatly among 4 experimental sites and through time. After 3+ years, survival among site/treatment combinations ranged from 0% to 0.04%. At the site where survival was greatest, the absolute density of oysters surviving to 3.41 years on enhanced habitat was estimated as 0.4 m⁻². This equated to an increase in relative density of commercial sized oysters from ~0.01 m⁻² prior to enhancement, to ~0.14 m⁻² at the end of the experiment, and demonstrated that habitat enhancement can elevate adult oyster densities to commercial levels on areas of seabed where oysters were previously below threshold densities for commercial fishing (0.02 m⁻²). Peaks in mortality occurred within experimental plots when oysters were less than one year old, and three years old. Growth modeling indicated that after 4.25 years, 98% of living oysters would attain legal size (≥ 58mm length), and 92% would attain sufficient shell depth (≥ 20 mm) to provide high grade (grade A in the industry) meat. Shell depth was a better morphometric predictor of meat weight than either shell height or shell length. The species assemblages on the shell-enhanced habitat were distinct from those on adjacent non-enhanced seabed. Measures of taxonomic and functional richness, faunal densities, and taxonomic redundancy within functional groups all increased in enhanced habitat. Beta and gamma diversity also increased due to patchiness of the habitat created within enhanced experimental sites. Large scale habitat enhancement in Tasman Bay via the deposition of waste shell on the seabed is likely to confer benefits to ecosystem function associated with those community level effects. To sustain an oyster fishery in Tasman Bay, an ecosystem-based approach to fishery management is recommended to facilitate restoration of benthic habitats and communities and to help maintain ecosystem function supporting all components of the benthic community, including the oyster population. Planning and implementation of a combination of specific management measures including habitat enhancement, rotational fishing, permanent exclusion of towed fishing gear from a network of protected areas, and integration of the management of the oyster, scallop, and finfish fisheries would provide the best chance for restoration and maintenance of a sustainable oyster fishery.