Settlement of invertebrates is a key process affecting the structure of marine communities and underpins the ability of benthic ecosystems to recover from disturbance. While it is known that specific crustose coralline algae (CCA) are important for settlement of some coral species, the role of algal chemical compounds versus surface microbial biofilms has long been ambiguous. Using a model system - a CCA of a genus that has been shown to induce high levels of settlement of Acropora corals (Titanoderma cf. tessellatum) and an abundant coral species (Acropora millepora)- we show that chemical effects of CCA are stronger than those from CCA surface microbial biofilms as drivers of coral settlement. Biofilms contributed to some extent to larval settlement via synergistic effects, where microbial cues were dependent on the CCA primary metabolism (production of dissolved organic carbon). We propose that optimal coral settlement is caused by complex biochemical communications among CCA, their epiphytic microbial community and coral larvae.