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Habitat specificity plays a pivotal role in forming community patterns in coral reef fishes, yet considerable uncertainty remains as to the extent of this selectivity, particularly among newly settled recruits. Here we quantified habitat specificity of juvenile coral reef fish at three ecological levels; algal meadows vs. coral reefs, live vs. dead coral and among different coral morphologies. In total, 6979 individuals from 11 families and 56 species were censused along Ningaloo Reef, Western Australia. Juvenile fishes exhibited divergence in habitat use and specialization among species and at all study scales. Despite the close proximity of coral reef and algal meadows (10's of metres) 25 species were unique to coral reef habitats, and seven to algal meadows. Of the seven unique to algal meadows, several species are known to occupy coral reef habitat as adults, suggesting possible ontogenetic shifts in habitat use. Selectivity between live and dead coral was found to be species-specific. In particular, juvenile scarids were found predominantly on the skeletons of dead coral whereas many damsel and butterfly fishes were closely associated with live coral habitat. Among the coral dependent species, coral morphology played a key role in juvenile distribution. Corymbose corals supported a disproportionate number of coral species and individuals relative to their availability, whereas less complex shapes (i.e. massive & encrusting) were rarely used by juvenile fish. Habitat specialisation by juvenile species of ecological and fisheries importance, for a variety of habitat types, argues strongly for the careful conservation and management of multiple habitat types within marine parks, and indicates that the current emphasis on planning conservation using representative habitat areas is warranted. Furthermore, the close association of many juvenile fish with corals susceptible to climate change related disturbances suggests that identifying and protecting reefs resilient to this should be a conservation priority.