Seagrass meadows are regularly used by fish as resident, transient, or nursery habitat. However, there is a long-standing debate on how spatial variability of seagrass fish assemblages is determined. We examined the influence of seagrass structural complexity, physical water conditions, and proximity of neighboring shallow-water habitats on tropical fish assemblage composition in a shallow seagrass-dominated embayment at Zanzibar Island in the western Indian Ocean. Sampling of fish assemblages was carried out in seagrass meadows dominated byEnhalus acoroidesorThalassia hemprichii(3 localities each), 1 mixed meadow, and 1 unvegetated area. Overall, the density and biomass of fish were dominated by juvenile and subadult herbivores, either stationary seagrass residents or fish associated with coral reef and seagrass habitats. In terms of number of fish species, the majority were either carnivorous or omnivorous, and mainly coral-seagrass-associated. Multiple regression analysis indicated that canopy height was the foremost predictor for density, biomass, and species richness of juvenile fish, whereas adult and subadult fish densities were predicted by water depth. Moreover, distance-based correlation analyses revealed that fish assemblage structure was significantly correlated with the distance to neighboring mangrove and coral-reef habitats, shoot density, and (although weaker) canopy height. Based on these findings, attributes of seagrass structure and the location of a seagrass habitat within the seascape context appear to be important determinants of spatial patterns and variability of seagrass fish assemblages. This kind of information is important for spatial coastal management and for the selection of marine protected areas.