The propagules of most species of reef fish are advected from the reef, necessitating a return to reef habitats at the end of the pelagic stage. There is increasing evidence of active attraction to the reef but the sensory abilities of reef fish larvae have not been characterized well enough to fully identify cues. The electrophysiological methods of auditory brainstem response (ABR) and electroolfactogram (EOG) were used to investigate auditory and olfactory abilities of pre- and post-settlement stages of a damselfish, Pomacentrus nagasakiensis (Pisces, Pomacentridae). Audiograms of the two ontogenetic stages were similar. Pre-settlement larvae heard as well as their post-settlement counterparts at all but two of the tested frequencies between 100 Hz and 2,000 Hz. At 100 and 600 Hz, pre-settlement larvae had ABR thresholds 8 dB higher than those of post-settlement juveniles. Both stages were able to detect locally recorded reef sounds. Similarly, no difference in olfactory ability was found between the two ontogenetic stages. Both stages showed olfactory responses to conspecifics as well as L-alanine. Therefore, the auditory and olfactory senses have similar capabilities in both ontogenetic stages. Settlement stage larvae of P. nagasakiensis can hear and smell reef cues but it is unclear as to what extent larvae use these sounds or smells, or both, as cues for locating settlement sites.