A primary goal of many coastal restoration programs is to increase nekton habitat in terms of both quantity and quality. Using shallow water ponds rehabilitated with a technique called marsh terracing, we examined the quality of nekton habitat created, using and comparing several metrics including nekton density and diversity, functional group composition, and weight-length relationships as indirect measures of habitat quality. We examined three paired terraced and unterraced marsh ponds in southwest Louisiana. Nekton, submerged aquatic vegetation (SAV), and soil and water quality variables were sampled bimonthly from April 2004 through April 2005 at four subtidal habitat types: terraced nearshore, terraced open water, unterraced nearshore, and unterraced open water. Results indicate that terraced ponds had increased the habitat value of degrading unterraced ponds over open water areas for estuarine nekton; nekton density and richness were similar between terraced and unterraced nearshore habitat types, but greater at all nearshore as compared to open water sites. Analysis of the distribution of nekton functional groups and weight:length ratios indicates the terraced and unterraced pond habitats were not functioning similarly: distribution of nekton functional groups differed significantly between habitat types with greater percentages of benthic-oriented species at unterraced open water habitats and higher percentage of open water species in terraced ponds as compared to unterraced ponds, and two of the six numerically dominant fish species had greater weight-length relationships in unterraced ponds as compared to terraced ponds. This lack of functional equivalency may be attributed to environmental differences between terraced and unterraced ponds such as water depth or SAV biomass, or the relatively young age of the terraces studied, which may not have allowed for the development of some critical habitat variables, such as soil organic matter that was found to be significantly lower in terraced versus unterraced ponds (p < 0.05). To properly assess the ecological equivalency of restored or rehabilitated sites for nekton requires that we move beyond measures of nekton density, biomass, and diversity and incorporate measures of functional equivalency, including habitat measures. ?? 2007 Estuarine Research Federation.