This paper presents the results of a series of habitat selection experiments aimed at determining if juvenile Melicertus latisulcatus generally occur on intertidal sand- and mud-flats as a result of active selection of unvegetated areas, or due to extrinsic factors (e.g. differential predation). In the laboratory, juvenile M. latisulcatus showed a clear preference for habitats containing sand irrespective of the presence or absence of predators. If sand was not available, artificial seagrass was chosen as a secondary preference but was avoided when sand alone was also present. Importantly, the combinations of habitats chosen for testing allowed us to determine that artificial seagrass provided a good surrogate for real seagrass, and that the presence of potential food (epiphytes) did not appear to influence habitat selection. There was also no difference in the habitat selected between day and night, and only minor differences with prawn size. Thus, juvenile M. latisulcatus appear to have a hierarchy of mechanisms for avoiding predators, with burying in sand being the preferred option. If burying is not possible, then seagrass is used for shelter. Active habitat selection to avoid predation appears likely to play a substantial role in determining the distribution of these animals on unvegetated sand- and mud-flats.