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Seagrasses – a group of foundation species in coastal ecosystems – provide key habitat for diverse and abundant faunal assemblages and support numerous ecosystem functions and services. However, whether the habitat role of seagrasses is influenced by seagrass diversity, by dominant species or both, remains unclear. To that end, we sought to investigate the specific seagrass characteristics (e.g., species diversity, seagrass traits) that influence tropical fish assemblages, and place this in the context of small-scale fishery use. We surveyed seagrass variables at 55 plots, nested within 12 sites around Zanzibar (Tanzania) in the Western Indian Ocean, and used Baited Remote Underwater Video (BRUV) systems to assess fish assemblages across plots. Using linear mixed models, we reveal that seagrass structural complexity and depth were the best predictors of fish abundance, with higher abundance occurring in deeper meadows or meadows with high canopy, leaf length and number of leaves per shoot. Moreover, an interaction between seagrass cover and land-use was the best predictor of fish species richness, where sites closer to human impacts were less affected by cover than sites with lower human impact. Overall, models with seagrass species richness or functional diversity as predictors poorly explained fish assemblages. Fish taxa that were important for small-scale fishery sectors (e.g., emperors, snappers, rabbitfish, and parrotfish) were primarily driven by seagrass structural complexity. Our results provide a unique analysis of the relationship between seagrass habitat and its associated fish assemblages in that we show that seagrass species diversity had little effect on seagrass fish assemblages, which instead appear driven by specific seagrass traits and seagrass cover. If conserving high value species that support adjacent fisheries is the priority for protecting seagrass meadows, then seagrass areas should be chosen with high cover and structural complexity that are in deeper waters. Any conservation measures also need to balance the needs of fishers that use the resources supported by seagrasses.