Population connectivity through larval dispersal is an essential parameter in models of marine population dynamics and the optimal size and spacing of marine reserves. However, there are remarkably few direct estimates of larval dispersal for marine organisms, and the actual birth sites of successful recruits have never been located. Here, we solve the mystery of the natal origin of clownfish (Amphiprion polymnus) juveniles by mass-marking via tetracycline immersion all larvae produced in a population. In addition, we established parentage by DNA genotyping all potential adults and all new recruits arriving in the population. Although no individuals settled into the same anemone as their parents, many settled remarkably close to home. Even though this species has a 9-12 day larval duration, one-third of settled juveniles had returned to a 2 hectare natal area, with many settling <100 m from their birth site. This represents the smallest scale of dispersal known for any marine fish species with a pelagic larval phase. The degree of local retention indicates that marine reserves can provide recruitment benefits not only beyond but also within their boundaries.