To test whether near-bed hydrodynamics modify larval settlement, field and flume experiments were conducted where larval settlement was compared between microdepositional environments (small depressions) and non-trapping environments (flush treatments). Flume flow simulations with the polychaete Capitella sp. I and the bivalve Mulinia lateralis demonstrated that although larvae of both species were generally able to actively select a high- organic sediment typical of adult habitats over a low-organic alternative with a comparable grain size, elevated densities of both species were observed in depressions for a given sediment treatment. In field experiments carried out in Buzzards Bay, Massachusetts, significantly higher densities of Mediomastus ambiseta juveniles, spionid polychaete juveniles, bivalves, gastropod larvae, and nemerteans were observed in depressions compared with flush treatments over 5 experimental periods (3-4 days each) during the summer of 1990, suggesting that larvae were passively entrained in depressions. These experiments suggest that near-bed hydrodynamics may modify settlement at some scales, and that both active and passive processes may determine larval distributions in shallow-water, muddy habitats. In a deep-sea habitat near St. Croix at 900 m depth, the Johnson- SeaLink submersible was used to deploy experiments designed to test the role of larval habitat selection for different patch types versus near-bed flow effects. Densities of colonizers in flush sediment-tray treatments were higher than in depression treatments for total individuals and dominant colonizers, suggesting that passive entrainment did not occur and habitat selection was highly active. Experiments comparing larval response to different types of enrichments (no enrichment, enrichment with Thalassiosira sp. or Sargassum sp.) over different periods of time (23 days or 29 months) indicated that different species respond depending on type of organic matter and duration of deployment. These findings support the hypothesis that small- scale patches create microhabitats for colonizing species, thus reducing competitive interactions and enhancing species richness. Small-scale patches of different organic composition and age may therefore be an important and variable resource contributing to the immense species diversity that has recently been reported for deep-sea habitats.