Drivers of recruitment in sessile marine organisms are often poorly understood, due to the rapidly changing requirements experienced during early ontogeny. The complex suite of physical, biological, and ecological interactions beginning at larval settlement involves a series of trade‐offs that influence recruitment success. For example, while cryptic settlement within complex microhabitats is a commonly observed phenomenon in sessile marine organisms, it is unclear whether trade‐offs between competition in cryptic refuges and predation on exposed surfaces leads to higher recruitment.To explore the trade‐offs during the early ontogeny of scleractinian corals, we combined field observations with laboratory and field experiments to develop a mechanistic understanding of coral recruitment success. Multiple experiments conducted over 15 months in Palau (Micronesia) allowed a mechanistic approach to study the individual factors involved in recruitment: settlement behavior, growth, competition, and predation, as functions of microhabitat and ontogeny. We finally developed and tested a predictive recruitment model with the broader aim of testing whether our empirical insights explained patterns of coral recruitment and quantifying the relative importance of each trade‐off.Coral settlement was higher in crevices than exposed microhabitats, but post‐settlement bottlenecks differed markedly in the presence (uncaged) and absence (caged) of predators. Incidental predation by herbivores on exposed surfaces at early post‐settlement (<3 mm) stages and targeted predation by corallivores at late post‐settlement (3–10 mm) stages exceeded competition in crevices as major drivers of mortality. In contrast, when fish were excluded, competition with macroalgae and heterotrophic invertebrates intensified mortality, particularly in crevices. As a result, post‐settlement trade‐offs were reversed, and recruitment was more than twofold higher on exposed surfaces than crevices. Once post‐settlement bottlenecks were overcome, survival was higher on exposed surfaces regardless of fish exclusion. However, maximum recruitment occurred in crevices of uncaged treatments, being ninefold higher than caged treatments. Overall, we characterize recruitment success throughout the earliest life‐history stages of corals and uncover some intriguing trade‐offs between growth, competition and predation, highlighting how these change and even reverse during ontogeny and under alternate disturbance regimes.