To determine whether an artificial reef installation is feasible, there must be a thorough characterization of the habitat. An understanding of both small-scale and large-scale environmental processes is needed to determine factors that potentially will influence the reef. Large-scale processes include coastal circulation, wave climate, and sediment dynamics that take place over spatial scales of tens to hundreds of kilometers in the region of the reef. Small-scale processes include the physical characteristics in the immediate vicinity of the reef - the local current, wave and tide characteristics, temperature, salinity, and suspended and bottom sediments at a proposed reef site. The city of Port Richey, Florida, was considering installing an artificial reef of porcelain modules near Durney Key, a dredge spoil island just offshore. To assist in determining the feasibility of this proposal, I pursued three objectives: a) to characterize the oceanographic setting of Durney Key, including hydrodynamics, water quality and invertebrate biota; b) to investigate the potential for successful coral recruitment and growth in Durney Key waters; and c) to determine if porcelain is a suitable substrate for settlement of the larvae of coral species present in west central Florida. An array of Acoustic Doppler Current Profilers (ADCPs) were used to measure water velocity, water stage and temperature around Durney Key. ADCP data showed currents around Durney Key are tidally dominated with velocities increasing in winter due to frontal passages. Seasonal stage variation ranges from 0.29 m (11.4 in) to 0.64 m (2.1 ft) and seasonal temperature ranged from 10°C and 35°C for winter and summer, respectively. Atmospheric data from the Port Richey COMPS site showed average wind speeds were higher in winter (3.7 m/s or 12.4 ft/s) than summer (3.1 m/s or 10.2 ft/s), corresponding to increased average water velocities. Inorganic nutrients, salinity and pH were measured and compared to data from patch reefs in the Florida Keys to characterize the water quality and determine its suitability for coral recruitment and growth. Compared to Florida Keys patch reef waters, Durney Key water salinity averaged 12 parts per thousand (ppt) lower, pH was more variable with a lower minimum, and total phosphorus was much higher. Ceramic and porcelain recruitment tiles deployed to investigate larval recruitment were colonized by turf, coralline and macroalgae, with barnacles recruiting secondarily. Sediment cores revealed foraminiferal and molluscan assemblages characteristic of productive estuarine conditions. The Durney Key area was deemed not suitable for coral recruitment and growth on an inshore artificial substratum because of temperature extremes, potential for minimal water movement during summer, frequent occurrences of low salinity and pH, and high total organic phosphorus. Faunal studies demonstrated that the dominant recruitment reflects the common coastal/estuarine biota, which does not include reef-building corals.