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The western rock lobster (Panulirus cygnus [George 1962]) is the basis for Australia's most valuable single species wild caught fishery. The ability of early juvenile western rock lobster to select and settle onto suitable habitats is critical for the recruitment of this commercially important species. Many marine organisms, including the western rock lobster, have highly complex olfactory systems that allow for various behaviours including habitat selection and the location of food. We tested the active habitat selection of early juvenile western rock lobsters using only chemotaxis in scent based trials. We used a Y-maze bio-assay with which we were able to present individuals with several different natural scent stimuli. This study used three commonly observed broad habitat complexes followed by three fine scale seagrass assemblages to provide different scent stimuli. Seagrass habitats were chosen significantly more often by the juvenile lobsters in the broad habitat scale trials over bare sand and turf habitats. At a finer scale, lobsters showed a mixed response but tended to choose the canopy forming seagrass species, Amphibolis antarctica [(Labillardière) Sonder & Ascherson ex Ascherson, 1868] and Posidonia australis [Hooker, 1858] significantly more often than the other scents provided. This study developed a Y-maze chemotaxis assay for P. cygnus and confirmed that they respond to habitat related scent cues. These findings suggest the importance of seagrass habitats to early juvenile western rock lobsters and the potential impacts that habitat change may have on the successful recruitment of this commercially important species. • We demonstrate chemotaxis based habitat selection of early juvenile western rock lobster. • Seagrass habitats were chosen most frequently over the other habitats presented. • This study suggests the importance of shallow seagrass habitat for early juvenile Panulirus cygnus. [ABSTRACT FROM AUTHOR]