To test whether coral planulae recruit randomly to different coral reef habitats or have specific substratum preferences, the settling behavior of planulae from two shallow water coral species from Pago Bay, Guam (13 degrees 25.02N, 144 degrees 47.30E) were examined in the laboratory in June and July of 1995. Goniastrea retiformis is generally restricted to the shallow reef front (< 10 m depth) in areas dominated by crustose coralline algae (CCA), while Stylaraea punctata is abundant on inner reef flats were CCA coverage is low and sand and carbonate rubble covered by biofilms is common. When presented with four substrata (1) carbonate rock scrubbed free of biofilm and dried as a control, (2) the CCA Hydrolithon reinboldii, (3) the CCA Peyssonelia sp., and (4) naturally conditioned carbonate rubble covered by a biofilm, G. retiformis larvae showed a significant preference for H. reinboldii, and S. punctata larvae for the carbonate biofilm treatment. The preference shown by S. punctata larvae for biofilmed surfaces did not diminish with increasing larval age up to 11 days. These results suggest that the larvae of both species are capable of habitat selection, and that the preferred substrata among those tested bears a relationship to the habitats in which adult colonies were found.