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The settlement of coral larvae is an important process which contributes to the success and longevity of coral reefs. Coral larvae often recruit to benthic structures covered with crustose coralline algae (CCA) which produce cues that promote settlement and metamorphosis. The PeysonneliaceaeRamicrustaspp. are red-brown encrusting alga that have recently become abundant on shallow Caribbean reefs, replacing CCA habitat, overgrowing corals and potentially threatening coral recruitment. In order to assess the threat ofRamicrustato coral recruitment, we compared the survival and settlement ofPorites astreoidesandFavia fragumlarvae to 0.5 – 2 mg ml^-1solutions ofRamicrustasp. or CCA as well as sterile seawater (control). In all cases larval mortality was extremely high in theRamicrustatreatments compared to the CCA and control treatments. We found 96% (± 8.9% standard deviation, SD) mortality ofP. astreoideslarvae when exposed to solutions ofRamicrustaand 0 - 4% (± 0 - 8.9% SD) mortality in the CCA treatments. We observed 100%F. fragumlarval mortality when exposed toRamicrustaand 5 – 10% (± 10 – 20% SD) mortality in the CCA treatments. Settlement or surface interaction of larvae in the CCA treatments was 40 - 68% (± 22 - 37% SD) forP. astreoidesand 65 - 75% (± 10 - 19% SD) forF. fragum. TwoP. astreoideslarva that survivedRamicrustaexposure did settle/surface interact, suggesting that some larvae may be tolerant toRamicrusta. These results suggest thatRamicrustais a lethal threat to Caribbean coral recruitment.