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In coral reefs, restoration actions often involve artificial construction since physical structure enhances physico-chemical conditions for benthic communities and provides habitat for reef-associated fauna. We evaluated the performance of 4 restoration structures (RS, aged 5 to 12 yr) by comparing convergence of their benthic assemblages to adjacent reference reefs (REF). Multivariate clustering indicated that benthic assemblages were significantly distinct between RS and REF, as well as among sites. Differences were primarily attributable to weedy macroalgal and cyanobacterial groups, not slow-growing corals and crustose coralline algae. RS had a higher abundance of cyanobacterial turfs that can negatively affect adult and larval corals. To elucidate potential cascading effects on reef development, we tested whether exudates of the distinct RS and REF assemblages inhibit settlement by planulae of 3 coral species in laboratory assays. Relative settlement deterrence (versus seawater controls) was variable both between sites and among coral species. For example, both RS and REF exudates from one site were deterrent to settlement for Acropora palmata and Diploria strigosa, but, for Montastraea faveolata, RS (but not REF) exudates from a second site were deterrent, while RS exudates from the first site were not. Overall, results indicate that divergence of benthic assemblages is not simply attributable to incomplete succession, but appears to be a persistent, possibly stable state and that benthic algal/cyanobacterial assemblages on both RS and REF in these locations impair 'recruitment potential' for framework-building corals to some degree.