The extent of dispersal by pelagic larvae in marine environments, including coral reefs, is central for understanding local population dynamics and designing sustainable marine reserves. We present here the first example of a clear stepping-stone genetic structure throughout the Caribbean basin for a common coral reef species, the French grunt (Haemulon flavolineatum). Analysis of microsatellite DNA markers indicated that French grunt population structure may be characterized by overlapping populations throughout the Caribbean, influenced by independent population dynamics but with no fixed geographical boundaries. In addition, different spatial genetic patterns were found in different oceanographic regions. A second species, the bluehead wrasse (Thalassoma bifasciatum), has a much longer pelagic larval duration than French grunts and showed no explicit spatial pattern of genetic variation. This finding is concordant with the hypothesis of a positive relationship between larval dispersal and duration in the plankton. While the magnitude of the genetic signal of population structure in French grunts was very low (FST≈0.003), the pattern of isolation-by-distance throughout the Caribbean indicated considerable population structure with important ecological and conservation significance.