[Truncated abstract] Kelp beds of South-Western Australia have high alpha (within habitat) diversity, through high species turnover at small spatial scales. The E. radiata canopy has a strong negative influence on the diversity of the understorey through intense interspecific competition for light. Literature suggests that when the competitively dominant species such as E. radiata are physically removed, diversity will increase, as less competitive species become more abundant. Apart from disturbance, evidence suggests that reef topography at the 1-10 m vertical scale also has an influence on the structure of the kelp beds, particularly in reference to relative abundance of canopy algae and species richness of the assemblage. In this thesis, I explore the role of algal assemblage recovery from physical disturbance to maintain high diversity. I also investigate the influence of reef structure (in terms of topography at the 1-10 m vertical scale) on assemblage recovery. This thesis provides a valuable functional explanation for the high diversity observed in South-Western algal assemblages. In addition, it explores the influence of reef topography which has received little attention to date . . . Overall, this thesis argues that the high alpha diversity in algal assemblages of South-Western Australia is due to local scale processes including disturbance and assemblage recovery which generate diversity by the creation of species rich gap states and by phase-shifts during the recovery process, creating a mosaic of different patch types. Assemblage recovery is composed of several processes, including survival of juvenile kelp sporophytes and canopy shading, added to macroalgal diversity through spatial and temporal variation in their outcomes. Reef topography contributed to algal diversity by influencing the processes associated with assemblage recovery through alteration of key physical variables including light levels and water motion.