We compare the value of using habitat categories and species assemblages as surrogates for marine biological diversity in the context of choosing a set of representative areas for a marine reserve network. Habitat categories were based on interpretation of aerial photographs and maps, and on local knowledge. Species assemblages were created from comprehensive survey data on 977 taxa (mainly species), derived from an intensive three-year study of a temperate marine embayment, and classified into plant, fish, and invertebrate assemblages. Reserves were selected using a heuristic iterative algorithm to simulate a marine reserve network based on 10-80% representation of each surrogate. The effectiveness of each surrogate was evaluated by comparing the number of taxa that would be coincidentally included in each simulated reserve for the bay. Areas selected to represent 10% or 20% of the surrogates were best chosen using fish or invertebrate assemblages, because by spatial coincidence, they included 60-80% of all available taxa. However, areas selected to represent ���40% of the surrogates were generally best derived from habitat categories, because they included ���93% of all available taxa. Plant assemblages were generally poor surrogates for overall species richness. These findings suggest that habitat-level surrogates may be a highly cost-effective method for initial identification of high-priority areas to manage marine diversity of coastal ecosystems.