Differences in fish community structure between different estuaries, lagoons and bays can be very large, and generalisations are complicated by the use of a wide variety of sampling methods. In the present study, fish communities of subtidal seagrass beds and sandy seabeds in 13 marine embayments of a single Caribbean island were therefore sampled using a uniform method. The objective of the study was to determine whether the seagrass and sandy seabed habitats of various embayments are characterised by typical fish assemblages which differ in terms of taxa (species, families), size classes (life stages) and functional groups (ecological species groups, feeding time and diet). This was linked to the hypothesis that differences in fish assemblages between habitats in different embayments are larger at taxonomic levels than at the level of functional groups. A second objective was to determine the most useful discriminating features between the two habitat types. The above hypothesis was rejected, since differences in fish assemblages from different seagrass and sandy seabed sites did not increase from functional to taxonomic level, but from size class to diet/species to family/feeding time to ecological species group. However, the seagrass and sandy seabed habitats could each be characterised by typical fish assemblages which differed in taxonomical and functional group composition, irrespective of differences in environmental and biotic variables between the embayments in which these habitats were situated. The two habitat types could be best characterised on the basis of fish family, ecological species group, feeding time and size distribution. Seagrass beds mainly harboured nocturnally active nursery species (Haemulidae, Lutjanidae, etc.), whose relative abundance was related to vegetation (mainly seagrass) cover. Sandy seabeds mainly harboured diurnally active bay species (Gerreidae, etc.) whose relative abundance was related to cover of bare sand. Similarities in taxonomical and functional traits of fish species predicted whether they occurred more abundantly in seagrass beds or in sandy seabeds.