Species richness and abundance of animals in a particular habitat are often not independent of neighbouring habitats. Concern centres on whether changes to adjacent habitats (e.g. unprotected habitats) can affect the conservation value of protected habitats. The extent to which these concerns are real may be affected by differences in dispersal mode and capacity of the target animals. We tested the interactive effects of size (small vs. large) and isolation (near vs. far) of neighbouring habitats on the assemblage composition, species richness and abundance of 2 taxonomic groups with contrasting adult dispersal modes; copepods as water column swimmers and polychaetes as benthic crawlers. Artificial habitats that are structurally similar to natural articulated coralline algae were used because manipulation of habitat size (small: 40 × 40 mm, large: 120 × 120 mm) and isolation (near 100 mm, far 300 mm) was easier. The different levels of size and isolation used were within the range seen in natural habitats at the study site. Isolation of habitats had a greater effect on assemblages of polychaetes, as may be expected for more limited dispersers. The composition of polychaetes differed between near and far habitats independent of their size, while copepod composition only differed between sizes of habitat when they were far apart. While we predicted that greater abundance and species richness would occur in habitats adjacent to large habitats, only polychaetes were consistent with this pattern. Copepod richness and abundance, in contrast, were greater in habitats that were far from small habitats, providing evidence for the ‘nearest refuge hypothesis’. These results reinforce the need to consider issues of dispersal and proximity to neighbouring habitats when planning protected areas to achieve conservation goals. ; Bayden D. Russell, Bronwyn M. Gillanders and Sean D. Connell ; Copyright © 2005 Inter-Research.