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Experimental manipulations of grazing intensity were used to examine the role of herbivorous fishes in the families Acanthuridae (surgeonfishes) and Scaridae (parrotfishes) in determining distributions and abundances of benthic species within and among shallow tropical reef habitats. A back reef habitat along the Belizean barrier reef was characterized by a diverse benthic assemblage of algal turfs, coralline algae, and the coral Porites astreoides, but by extremely low macroalgal abundance. In contrast, several nearby shallow habitats were dominated by dense stands of several macroalgal species. Experimental reduction of herbivorous fish grazing in the back reef (achieved by constructing exclosures) rapidly and dramatically altered existing patterns of benthic species composition and species abundances. After 10 wk of reduced herbivory, total macroalgal abundance increased significantly in herbivore exclusion areas relative to unmanipulated controls, and was correlated with decreased percent cover of available space, several algal turf species, crustose coralline algae, and Porites. Some macroalgal species were able to directly overgrow and kill portions of Porites colonies within herbivore exclusion treatments. Successful recruitment and growth of several algal species under experimentally reduced herbivory indicated that macroalgal species distributions may be limited by herbivory rather than by lack of spore availability or unsuitable physical conditions. Algal turfs characteristic of many reef habitats appear to represent herbivore—tolerant assemblages, persisting under high grazing intensity but responding rapidly to reduced herbivory with increased abundances, morphological changes, and altered reproductive status. These results suggest that herbivorous fish grazing profoundly influences benthic species distributions and abundances within some tropical reef habitats. Spatial variation in herbivory appears to be of fundamental importance in determining regional patterns of benthic community structure on tropical reefs. The spatial mosaic of benthic community composition among shallow reef habitats was associated with patterns of grazing intensity by herbivorous fishes. Several reef habitats supporting dense macroalgal stands represented spatial refuges from herbivory, with low herbivorous fish densities and reduced grazing intensities. Transplant experiments revealed that algal species characteristic of these low—herbivory habitats were highly susceptible to grazing by herbivorous fishes. Spatial heterogeneity in grazing intensity may contribute to high regional diversity among tropical reef habitats by maintaining different benthic species assemblages under fundamentally distinct selective regimes.