Assembly rules provide a useful framework for predicting patterns of community assembly under defined environmental conditions. Habitat created by canopy-forming algae (such as kelps) provides a promising system for identifying assembly rules because canopies typically have a large and predictable influence on understorey communities. Across >1,000 km of subtidal South Australian coastline, we identified natural associations between assemblages of understorey algae and (1) monospecific canopies of Ecklonia radiata, (2) canopies comprised of E. radiata mixed with Fucales (Cystophora spp. and Sargassum spp.), and (3) gaps among canopies of algae. We were able to recreate these associations with experimental tests that quantified the assembly of understorey algae among these three habitat types. We propose the assembly rule that understorey communities on subtidal rocky coast in South Australia will be (1) monopolised by encrusting coralline algae beneath monospecific canopies of E. radiata, (2) comprised of encrusting corallines, encrusting non-corallines, and sparse covers of articulated corallines, beneath mixed E. radiata-Fucales canopies, and (3) comprised of extensive covers of articulated corallines and filamentous turfs, as well as sparse covers of foliose algae and juvenile canopy-formers, within gaps. Consistencies between natural patterns and experimental effects demonstrate how algal canopies can act as a filter to limit the subsets of species from the locally available pool that are able to assemble beneath them. Moreover, the subsets of species that assemble to subtidal rocky substrata in South Australia appear to be predictable, given knowledge of the presence and composition of canopies incorporating E. radiata.