Planktonic reef fish larvae locate and orient to reefs during settlement. Consequently, metamorphosis occurs in appropriate juvenile and/or adult habitats. Larval fish use otoliths for hearing (sagittae and asterisci) as well as equilibrium (lapilli) required for directional swimming. Striped blenny (Chasmodes bosquianus) and naked goby (Gobiosoma bosc) larvae, settled individuals, and juveniles were used to describe otolith ontogeny from hatching through settlement, the transition from pelagic to benthic habitats, and metamorphosis. Larvae hatched from nests collected in North Inlet estuary, SC, were cultured from May through July in 2012 and 2013 at ambient temperatures. Sagittae and lapilli were present at hatching in both species. Asterisci were only observed in settlement (gobies and blennies) or metamorphosis (blennies) stage fishes, regardless of age (days post-hatch). Otoliths within a pair were symmetrical. Fish total length increased faster than sagittae otolith length in settlement stage blennies and postflexion gobies. The allometric model explained ∼90% of the variability in sagittae otolith length with total length for both species. Settlement occurred 15–20 days post-hatch in striped blennies and 19–27 days post-hatch in naked gobies. Asterisci were found in 100% of settlement stage striped blennies and 67% of naked gobies. We hypothesize that the presence of asterisci in settlement stage demersal oyster reef fishes facilitates identification of and orientation to suitable settlement habitats thereby enhancing recruitment success.