The success of the larval stage in fishes plays a critical role in structuring adult fish populations. It is well understood that juveniles of many marine fish species are closely associated with nearshore and coastal habitats that serve as nursery areas while adult assemblages are more widely distributed. The larval phase however, particularly pertaining to nursery habitat use, remains poorly understood in South Africa. A mixed-method, larval and juvenile fish study was conducted in the warm-temperate shallow coastal waters of Algoa Bay, South Africa. Two years (2010 – 2012) of seasonal sampling at 27 stations at various habitat types revealed distinct spatio-temporal patterns in larval fish composition and abundance. In total, 164 species from 50 families were collected in the nearshore (<30 m), over reef and sand, in the surf zone and large estuarine habitats in Algoa Bay. Engraulidae dominated the larval fish catch in the nearshore (38.4 percent) and over the selected reef and sand habitats (37.8 percent). Cynoglossidae (28.1 percent) and Sparidae (8.4 percent) were the second and third most abundant fish families in the nearshore. In subtidal reef and sand habitats, Gobiidae (23.4 percent) and Clupeidae (9.2 percent) were the second and third most abundant families respectively. Sparidae dominated (71.4 percent) surf zones followed by Soleidae (10.8 percent) and Mugilidae (5.3 percent), while in the mouth area of two permanently open estuaries in Algoa Bay, Gobiidae (35.9 percent) Sparidae (30.1 percent) and Mugilidae (12.4 percent) dominated. Several species from the Blenniidae, Gobiesocidae, Gobiidae, Scorpaenidae and Tripterygiidae fish families complete their pelagic larval phase in the reef habitats in Algoa Bay. These reef habitats therefore serve as important nursery areas for the larvae of benthic species. The sand and nearshore habitats serve as nursery areas for Clupeidae and Engraulidae. Highest densities of Carangidae, Sciaenidae and Sparidae larvae were observed at the subtidal reef habitats indicating that this area is important for accumulation of the early developmental stages of these fishes. The nearshore serves as an important accumulation habitat for species in the Haemulidae and Soleidae families whose juveniles are known to recruit into estuarine nursery areas. The nearshore therefore is a specific area of presettlement buildup of larvae prior to settlement of larvae or juveniles in estuarine nursery areas. Cynoglossidae larvae are also using the nearshore as an accumulation area prior to settlement and recruitment into adult populations occurring in shallow water habitats. In the surf zone, not only are estuary-dependent fish species utilizing this habitat as a nursery area, but marinespecies whose adults are either associated with rocky shores or surf zones are similarly using these areas as nursery habitats. In addition, estuary-dependent fish species which spawn in the marine environment are actively recruiting into estuarine nursery areas on both tides. Active recruitment against the outgoing ebb tide flow was a conclusive finding in this study. These larvae and juveniles are actively swimming against the ebb tide in the shallower, slower-flowing marginal areas where current flow is reduced. Strong environmental gradients on multiple temporal and spatial scales occur in Algoa Bay. Seasonal patterns were evident in larval densities, richness and diversity. Peaks in density, richness and diversity occurred during spring and summer (September to February) associated with increasing water temperatures and a high productivity providing a good food environment for larval fishes. Thereafter densities declined steadily as a result of natural mortality, settlement or adult spawning activity, until autumn when numbers dropped suddenly as the surviving larvae moved to settlement habitats. The relationship between larval fish and environmental variables provides information useful to determine distributions. Therefore the Bay is particularly suited for modelling larval fish distributions. Using generalized linear models, larval fish density in the nearshore of Algoa Bay responded to different ocean features to varying degrees. Larval fish density responded positively to both upwelling and when warm water plumes, originating from an Agulhas Current meander, entered Algoa Bay. On subtidal reefs, habitat complexity played an important role in determining larval fish composition and diversity. The less structurally complex, reefassociated sand habitats, yielded higher species richness and diversity than the high and low profile reef habitats. Therefore, it is likely that the importance of less structurally complex habitats has been overlooked relative to other habitats in terms of their function for larval fishes. In the surf zone, wave period and wave height, which can be related to exposure, were the most significant environmental factors influencing larval fish assemblages. Greatest species diversity was observed in the surf zone habitats heavily influenced by wave action in the windward sector of Algoa Bay. The identification of spawning areas and the mapping of distributions of early developmental stages of fishes are important in providing data pertaining to the protection of these habitats. This is particularly relevant as a new marine protected area MPA)is planned for the eastern sector of Algoa Bay. Results from retrogressive plots indicate that the spawning locations of several species of coastal and pelagic fishes are occurring outside of the Bay, with the bay therefore serving as an accumulation area. Furthermore, distribution modelling results demonstrate that the early developmental stages of fishes in the shallow coastal habitats of Algoa Bay exhibit high spatial variability in their distributions. Results presented in this thesis help fill the knowledge gaps critical to the understanding of larval fish nursery areas of several economically and ecologically important fish species in Algoa Bay.