To determine whether pattern and diversity in benthic sedimentary communities are set primarily at colonization or by post-settlement biological interactions, we collected faunal cores and conducted reciprocal sediment transplant experiments at a sandy and a muddy site at 12 m depth, ~3 km apart off New Jersey. Multivariate analyses of cores collected at these sites in September 1994 indicated differences in the taxa determining local pattern, with the bivalve Spisula solidissima and the polychaete Polygordius sp. being dominant at the sandy site, and oligochaetes, several polychaete species and the bivalve Nucula annulata dominant at the muddy site. Individual cores from the sandy site were significantly less diverse than those at the muddy site. Short-term experiments (3-5 d) were deployed by divers at three different times (August-September, 1994). Replicate trays (100 cm2) filled with azoic sand or mud were placed flush with the ambient seafloor at both sites. Multivariate comparisons indicated that sediment treatment in trays played a greater role in determining colonization patterns in the first experiment, site played a greater role in the second, and both variables contributed in the third. This pattern suggests that larval settlement and habitat choice played an important role in the first and third experiments, and that local transport of recently settled juveniles from the surrounding sediments was important in the second and third experiments. Sandy-site trays had significantly lower diversity than muddy-site trays, but there was no effect of sediment type in trays on diversity of colonizers. These experiments focused on small spatial scales and three short time periods, but they demonstrate that species patterns in some environments may be set by habitat selection by larvae and by juvenile colonization from the surrounding community. Post-colonization processes such as predation and competition likely play a major role for some species, but patterns of initial colonization corresponded well with those in the local community.