Experiments on larval settlement of the opportunistic polychaete, Capitella sp. I, using three natural sediment treatments from the Buzzards Bay area (organic-rich mud from Sippewissett Marsh, organic-rich mud from New Bedford Harbor and low-organic sand from off the Weepecket Islands), and a glass bead mixture similar in grain size distribution to the New Bedford Harbor mud, were carried out in still water and two flume flows (near-surface velocities of 5 cm s−1 and 15 cm s−1; boundary-shear velocities of 0.26 cm s−1 and 0.64 cm s−1). For all three flow conditions the larvae settled in significantly greater numbers in the two mud treatments than in the glass beads. In some experiments there was significant discrimination between one or both mud treatments and sand. There was significantly higher settlement in sand than in glass beads in two of three experiments in both slow and fast flow. There was no difference in the ability of larvae to discriminate between the sediment treatments in the slow and fast flow. Strong row and column effects in the settlement of larvae in flow experiments (row 1 at the leading edge and column 4 toward the inner wall of the flume having the highest settlement) lend support to a model of interaction between larval swimming behavior and near-bottom flow. Larvae that were not offered a settlement cue for 3–6 d showed no diminution in their subsequent settlement rate or capacity for habitat selection in fast flow. Capitella sp. I larvae are adapted to contribute to the large, local population increases that characterize the species by virtue of being competent to settle immediately after hatching. Once they are mixed up into the water column, however, their capacity for postponing metamorphosis and their habitat selectivity will promote dispersal and discriminate settlement in organic-rich patches.