Anthropogenic habitat alterations can have major impacts on the supply of new recruits to coastal fish populations. We aimed to determine the impact of kelp habitat patchiness and a reduction in canopy cover of Southern Australasia’s most dominant canopy forming kelp, Ecklonia radiata, on the recruitment of cryptic reef fish. We monitored larval recruitment across an array of 28 artificial reefs with transplanted Ecklonia, representing seven different reef patch sizes (from 0.12m2-6.68m2) crossed with four kelp densities (0, 4.1, 8.3 and 16.6 individuals/m2). 95 precent of the 232 individuals recorded were either Forsterygion gymnotum or Pictiblennius tasmanianus recruits, with both species showing a similar pattern of prevalence across the reefs. Overall, recruitment was higher on smaller reefs than larger reefs, but there was only a weak indication of any kelp density effects. However, canopy density was significant for Pictiblennius, where reefs with the highest kelp density and zero kelp had higher recruitment than reefs supporting kelp at low-density. We discuss the potential role of various settlement and post-settlement processes in driving these patterns and the likelihood that reef size, at this spatial scale, will influence whether the presence of a kelp canopy has a positive or negative influence on recruitment. In a connected reef-scape, declining Ecklonia cover is likely to result in adverse consequences for cryptic species similar to Forsterygion and Pictiblennius. However, small isolated reefs, especially those devoid of kelp, may form havens for larval settlers, but are unlikely to contribute meaningfully to adult populations.