We examined recruitment and ontogenetic habitat shifts of the yellow snapper Lutjanus argentiventris in the Gulf of California, by conducting surveys and collections in multiple mangrove sites and major marine coastal habitats from 1998 to 2007. Over 1,167 juvenile individuals were collected and 516 otoliths were aged to describe the temporal pattern of the settlement. L. argentiventris recruits in mangroves, where juveniles remain until they are approximately 100 mm in length or 300-days-old. Back-calculated settlement dates and underwater surveys indicated a major recruitment peak during September and October, around 8 days before and after the full moon. The majority of mangrove sites in the Gulf of California had a similar L. argentiventris average size at the beginning of the settlement season for the cohort of 2003; although there were significant differences in individual sizes at the end of the nursery stage. When sub-adults leave mangroves, they live in shallow rocky reefs and later become abundant in deeper rocky reefs. The density of migratory individuals (10–20 cm SL) decreased exponentially as the distance between a reef and a nearby mangrove site increased. This finding has important implications for local fishery regulations and coastal management plans.