When facing decisions about where to live, juveniles have a strong tendency to choose habitats similar to where their parents successfully bred. Developing larval fishes can imprint on the chemical cues from their natal habitat. However, to demonstrate that imprinting is ecologically important, it must be shown that settlers respond and distinguish among different imprinted cues, and use imprinting for decisions in natural environments. In addition, the potential role innate preferences play compared to imprinted choices also needs to be examined. As environmental variability increases due to anthropogenic causes these two recognition mechanisms, innate and imprinting, could provide conflicting information. Here we used laboratory rearing and chemical choice experiments to test imprinting in larval anemonefish (Amphiprion percula). Individuals exposed to a variety of benthic habitat or novel olfactory cues as larvae either developed a preference for (spent >50% of their time in the cue) or increased their attraction to (increased preference but did not spend >50% of their time in the cue) the cue when re-exposed as settlers. Results indicate not only the capacity for imprinting but also the ability to adjust innate preferences after early exposure to a chemical cue. To test ecological relevance in the natural system, recruits were collected from anemones and related to their parents, using genetic parentage analysis, providing information on the natal anemone species and the species chosen at settlement. Results demonstrated that recruits did not preferentially return to their natal species, conflicting with laboratory results indicating the importance imprinting might have in habitat recognition.