The invertebrate assemblages in sediments bordering exposed fringing reefs at Hanalei Bay, Kauai, Hawaii, were examined during July to September 1994. Densities of invertebrate animals larger than 0.5 mm in sediments of the bay ranged from counts of 10260 m^-2 in the fine carbonate sands of the central bay to 870 m^-2 in the habitat dominated by terrigenous silt near the reef edge close to the Hanalei river mouth. Similar sediment types supported broadly similar infaunal communities. Within the primarily carbonate sediments, mean grain size and wave exposure appear to have an important influence on the community. Taxonomic richness, number of individuals, and diversity showed significant negative relationships with exposure to wave energy (as estimated by sand ripple wavelength). The number of individuals was also significantly correlated with mean grain size. Overall, polychaetes and small crustaceans were numerically dominant among the major taxonomic groups investigated. Macrophagous and microphagous polychaetes had significant, but opposite, associations with grain size. In addition, microphagous polychaetes were significantly negatively correlated with wave exposure. No habitat variable measured could explain the variation in percent composition of crustaceans or echinoderms in the sedimentary habitats. The percentage of gastropods in the community was significantly negatively correlated with grain size, grain-size standard deviation and exposure, and positively with percent organic carbon. Bivalves were significantly positively associated with depth and grain size. These strong relationships imply that, in Hanalei Bay, physical processes are especially important in influencing assemblage structure, and that community structure and composition vary continuously along environmental gradients.