Demographic connectivity is fundamental to the persistence and resilience of metapopulations, but our understanding of the link between reproduction and recruitment is notoriously poor in open-coast marine populations. We provide the first evidence of high local retention and limited connectivity among populations spanning 700 km along an open coast in an upwelling system. Using extensive field measurements of fecundity, population size and settlement in concert with a Bayesian inverse modelling approach, we estimated that, on average, Petrolisthes cinctipes larvae disperse only 6.9 km (+25.0 km s.d.) from natal populations, despite spending approximately six weeks in an open-coast system that was once assumed to be broadly dispersive. This estimate differed substantially from our prior dispersal estimate (153.9 km) based on currents and larval duration and behaviour, revealing the importance of employing demographic data in larval dispersal estimates. Based on this estimate, we predict that demographic connectivity occurs predominantly among neighbouring populations less than 30 km apart. Comprehensive studies of larval production, settlement and connectivity are needed to advance an understanding of the ecology and evolution of life in the sea as well as to conserve ecosystems. Our novel approach provides a tractable framework for addressing these questions for species occurring in discrete coastal populations.