ABSTRACT: The functional extinction of the herbivorous sea urchin Diadema antillarum in the 1980s has contributed to the degradation of Caribbean coral reefs. In the early 2000s, recovering populations of D. antillarum were observed in several locations with mixed consequences for coral recruitment: D. antillarum improved habitat quality for settling coral larvae and recruits, but also contributed to settler mortality through (incidental) predation. To determine the relative importance of both mechanisms, tiles were deployed in the absence and presence of naturally occurring D. antillarum aggregations (2.0-2.8 sea urchins m^-2) in Curaçao, after which benthic community composition, ex situ settlement, and long-term (2.5 yr) in situ post-settlement survival of Acropora palmata larvae were quantified. After 3 mo, the presence of D. antillarum resulted in 44% more crustose coralline algae and 52% less turf algae, and a 75% canopy height reduction on the tiles’ exposed habitats. On the cryptic undersides of the tiles, the presence of D. antillarum was linked to lower abundances of sessile invertebrates and macroalgae. Larval settlement was almost 2 times higher on tiles conditioned in the presence of D. antillarum, with a strong preference (>70%) for the cryptic sides of tiles. Settlers returned to areas of reef encompassing D. antillarum populations were twice as likely to survive to the age of 2.5 yr. These findings support the beneficial role of D. antillarum in promoting coral recruitment by creating preferred settlement habitat and by increasing settler survival, and could be leveraged to improve coral restoration practices through dual-species conservation and/or co-culture strategies.