ABSTRACT: Despite the proliferation in coastal development world-wide little is known of the biological and ecological effects of man-made submerged habitats in coastal reefal environments. Such habitats, when able to move, offer unique environmental conditions, mainly in terms of hydrodynamic aspects. The current study tested whether floating habitats would develop unique communities in comparison to identical fixed ones, due to differences in current regime between the 2 types of habitat. We found significant differences in the hydrodynamic features associated with habitats of different motion capabilities, predominantly in mass-transfer rate, current velocity and shear stress. Floating installations had greater flow velocities and shear stress compared to fixed ones. We suggest that these hydrodynamic features determine the nature of the benthic communities on floating and fixed habitats, as the former revealed greater biomass and less chlorophyll content compared to the latter, while coral settlement was greater on the fixed installations, particularly near the seabed. The motion of floating artificial habitats increased the mass-transfer rate, as reflected by higher current velocities, and elevated the shear stress felt on their surfaces. These conditions encourage massive settlement of benthic macroinvertebrates and determine the community structure of floating artificial habitats in reefal environments.