ABSTRACT: Several long-standing hypotheses purport variation in recruitment to be positively correlated with pelagic environmental conditions that enhance larval growth, survival, and/or delivery to recruitment sites. However, the relationship between recruitment intensity and larval environmental conditions (or more directly, larval condition) is difficult to evaluate and poorly known for most species. We evaluate this relationship for the reef fish Forsterygion lapillum that commonly inhabits rocky reefs throughout New Zealand. We quantified variation in recruitment of F. lapillum using a nested sampling design, and found that the largest source of variation was between 2 nearby regions (a semi-enclosed harbour and an adjacent open coast system). We estimated ‘settler condition’ as the composite of residual body mass and 2 measurements of larval growth (reconstructed from otolith microstructure) and found that recruitment intensity was positively correlated with settler condition for sites within the harbour, but negatively correlated with settler condition for sites on the open coast. Mean pelagic larval duration of recruits to the harbour was ~3 d shorter than recruits to the open coast. These results suggest that larval experience and relationships between recruitment and settler condition are spatially variable. We speculate that (1) larval retention within a productive embayment facilitates a positive relationship between recruitment and settler condition while (2) dispersal through a less productive environment drives a negative relationship for replenishment on the open coast. These putative differences may have important implications for patterns of recruitment, the strength of post-settlement density-dependent interactions, and dynamics of local populations.