Sensory abilities and preferences exhibited by mobile larvae during their transition to juvenile habitats can establish spatial heterogeneity that drives subsequent species interactions and dynamics of populations. We conducted a series of laboratory and field experiments using coral reef fish larvae (Chromis viridis) to determine: ecological determinants of settlement choice (conspecifics vs. heterospecifics vs. coral substrates); sensory mechanisms (visual, acoustic/vibratory, olfactory) underlying settlement choice; and sensory abilities (effective detection distances of habitat) under field conditions. C. viridis larvae responded positively to visual, acoustic/vibratory, and olfactory cues expressed by conspecifics. Overall, larvae chose compartments of experimental arenas containing conspecifics in 75% of trials, and failed to show any significant directional responses to heterospecifics or coral substrates. In field trials, C. viridis larvae detected reefs containing conspecifics using visual and/or acoustic/vibratory cues at distances <75 cm; detection distances increased to <375 cm when olfactory capacity was present (particularly for reefs located up-current). We conducted high performance liquid chromatography (HPLC) analyses of seawater containing C. viridis juveniles and isolated high concentrations of several organic compounds. Subsequent laboratory trials demonstrated that C. viridis larvae responded positively to only one of these organic compounds. This compound was characterized by a weak polarity and was detected at 230 nm with a 31-min retention time in HPLC. Overall, our results suggest that fishes may use a range of sensory mechanisms effective over different spatial scales to detect and choose settlement sites, and species-specific cues may play a vital role in establishment of spatial patterns at settlement.