We address the conflict in earlier results regarding the relationship between dispersal potential and range size. We examine all published pelagic larval duration data for tropical reef fishes. Larval duration is a convenient surrogate for dispersal potential in marine species that are sedentary as adults and that therefore only experience significant dispersal during their larval phase. Such extensive quantitative dispersal data are only available for fishes and thus we use a unique dataset to examine the relationship between dispersal potential and range size. We find that dispersal potential and range size are positively correlated only in the largest ocean basin, the Indo-Pacific, and that this pattern is driven primarily by the spatial distribution of habitat and dispersal barriers. Furthermore, the relationship strengthens at higher taxonomic levels, suggesting an evolutionary mechanism. We document a negative correlation between species richness and larval duration at the family level in the Indo-Pacific, implying that speciation rate may be negatively related to dispersal potential. If increased speciation rate within a taxonomic group results in smaller range sizes within that group, speciation rate could regulate the association between range size and dispersal potential.