The neon damsel, Pomacentrus coelestis, is characteristic of surge zon
es on Australian coral reefs and is most abundant on outer slopes of r
eefs in the southern Great Barrier Reef. When settling, it appears to
'avoid' lagoonal habitats. Recruitment records confirm that this is a
general pattern regardless of whether lagoons have permanent or tempor
ary connections to the ocean. This study included direct sampling, aro
und One Tree Reef from the southern Great Barrier Reef, of all presett
lement stages of P. coelestis with the aid of light-traps, channel net
s and a plankton purse seine. Pelagic juveniles were abundant in catch
es from light-traps moored outside of the reef crest. In contrast, thi
s developmental stage was rare in catches from all gear types used wit
hin the lagoon. The channel nets collected newly hatched larvae that e
ntered the lagoon at night, but either they did not remain in the lago
on or they did not survive because they were not taken from the lagoon
by diurnal purse seines. This direct evidence shows that broad-scale
habitat selection can begin in the planktonic stage. It implies that p
elagic juveniles have excellent sensory and motor capabilities, which
disqualify them from being classified and modelled as plankton. Temper
ature records from inside and outside of the lagoon indicated that war
m plumes (up to 3 degrees C above ambient) influence reef waters near
One Tree Reef, and temperature may be one of the cues that presettleme
nt fish use to identify lagoonal habitats.