With only around 80 species globally, mangroves generally support low local tree species diversity while sustaining significant ecosystem services. The relationship between biodiversity and ecosystem function in mangroves has rarely been studied, especially when related to local forest diversity. The interdependence between biodiversity and function is important to healthy and functional mangrove ecosystems. Among the many functions of mangroves, juvenile nekton are known to utilize mangroves as their nursery habitat but the justification for this association is not clearly understood. Different plant species are expected to produce different quality of organic content derived from their respective decomposed leaf litter. These leaf litters, which mix into surrounding sediments, are expected to contain different carbon to nitrogen ratios and specific secondary metabolites, influencing its quality. Information on how organic content quality affects the juvenile nekton assemblages in mangroves is limited. This thesis assessed these questions quantitatively, using both field experiments and a laboratory experiment. The aim of this study was to enhance our understanding on how mangrove forests of different local species diversity (mixed forest of Avicennia marina and Rhizophora stylosa and monospecific forests of the two species) can affect the leaf litter decomposition rate, organic content and organic content quality in the sediment, including their adjacent mudflats. This information was then used to assess if the organic content quality from decomposing leaves and sediment influenced the juvenile nekton and invertebrate assemblages associated with the forest stands. The influence of the structural complexity in terms of root density of different forests on the juvenile nekton and invertebrate assemblages was also assessed. Finally, the influence of local tree diversity on the micro-habitat selection by the juvenile caridean shrimp (Palaemon debilis) was investigated in a laboratory choice experiment. Sampling of juvenile nekton and invertebrates was done in three mangrove forests at three locations in the wet and dry seasons in eastern Australia using the Simulated Aquatic Microhabitat (SAMs) method (Kneib, 1997). The animals’ assemblages in the three mangrove forests were characterized and quantified. For each forest, (i) the decomposition rate of A. marina and R. stylosa leaves; (ii) the relationship between animal assemblages and the organic content quality in the sediment; (iii) the relationship between animal assemblages and the structural complexity (root density); and (iv) the relationship between the isotopic signatures of the animal assemblages and the isotopic signatures of the forests were investigated. Juvenile nekton and invertebrate assemblages were highly variable among replicate samples, among different locations, forest types and seasons. The organic content of decomposing leaves and sediment, as well as the structural complexity in terms of root density, also varied spatially. While the factor location was a significant driver of the differences, the effect of forest types (local forest diversity) did not show a similar pattern across locations. The pattern also varied between the mangrove and mudflat habitats. For the decomposition study, it was anticipated that both A. marina and R. stylosa leaves would decompose faster in the mixed forest, however, there was no significant difference in the decomposition rates of the two species in different habitats. In mangrove habitats, sediment organic content was higher in the monospecific R. stylosa forest compared to the mixed forest and monospecific A. marina forest. However, in mudflat habitats significant difference in sediment organic content was only found when adjacent to monospecific R. stylosa forests or mixed forests. In mangrove habitats, the sediment was of lower quality in the mixed forest than in the R. stylosa forest. However, in mudflat habitats, there was no difference between the mixed and monospecific forests. The abundance of juvenile fish and invertebrates was higher only in the mangrove habitat of the mixed forest but not on the adjacent mudflat. In mangrove habitats, the number of species per family and species richness showed significant differences between the mixed forest and both monospecific R. stylosa and A. marina forests. In mangrove and mudflat habitats, Spearman’s rho showed that sediment quality was not related to animal abundance. The quality of decomposed leaf litter was higher in the mixed forest except for A. marina leaves in the adjacent mudflat. As expected, the quality of decomposed leaf litter improved over the decomposition time for all forest types in both habitats. Irrespective of forest type, animal abundance was not related to root density. However, based on location, Spearman rho showed that root density in Tallebudgera Creek was related to animal abundance in all forest types. Animal abundance related to root density during the wet season was related to mixed forest and monospecific Avicennia marina forest. Therefore, local forest diversity showed no clear influence in the relationship between animal abundance to both sediment quality in both habitats and root density in mangrove habitats. The δ13C of the leaves of A. marina and R. stylosa was generally different from those of the animals. Even though the mudflat adjacent to the mixed forest had higher quality of decomposed leaf litter (R. stylosa only), it was unrelated to the animal abundance and assemblages. The δ13C of R. stylosa leaves was close to the δ13C of one of the fish species from the same forest and this indicates R. stylosa potentially contributed to the diet of this fish. Results of the laboratory choice experiment indicated that the identity of mangrove forests influenced micro-habitat selection in the juveniles of Palaemon debilis. This response is probably mediated by olfactory cues from the mangrove leaf litter. This study is the first to show that P. debilis is able to detect and distinguish water-borne chemical cues from three different types of mangrove leaves. The chemicals released by the leaf litter of R. stylosa apparently acted as a positive cue that attracted the juvenile shrimps.