Fish were sampled with beach seines and small-meshed beam trawls in nearshore ( < 1 km) and shallow ( < 25 m) habitats on the southern coast of Kachemak Bay, Cook Inlet, Alaska, from June to August, 1996-1998. Fish distributions among habitats were analysed for species composition, catch-per-unit-effort (CPUE) and frequency of occurrence. Two oceanographically distinct areas of Kachemak Bay were sampled and compared: the Outer Bay and the Inner Bay. Outer Kachemak Bay is exposed and receives oceanic, upwelled water from the Gulf of Alaska, whereas the Inner Bay is more estuarine. Thermohaline properties of bottom water in the Outer and Inner Bay were essentially the same, whereas the Inner Bay water-column was stratified with warmer, less saline waters near the surface. Distribution and abundance of pelagic schooling fish corresponded with area differences in stratification, temperature and salinity. The Inner Bay supported more species and higher densities of schooling and demersal fish than the Outer Bay. Schooling fish communities sampled by beach seine differed between the Outer and Inner Bays. Juvenile and adult Pacific sand lance (Ammodytes hexapterus), Pacific herring (Clupea harengus pallasi), osmerids (Osmeridae) and sculpins (Cottidae) were all more abundant in the Inner Bay. Gadids (Gadidae) were the only schooling fish taxa more abundant in the Outer Bay. Thermohaline characteristics of bottom water were similar throughout Kachemak Bay. Correspondingly, bottom fish communities were similar in all areas. Relative abundances (CPUE) were not significantly different between areas for any of the five demersal fish groups: flatfishes (Pleuronectidae), ronquils (Bathymasteridae), sculpins (Cottidae), gadids (Gadidae) and pricklebacks (Stichaeidae).