Large differences in community structure of sea urchins and finfish have been observed in Kenyan reef lagoons. Differences have been attributed to removal of finfish predators through human fishing activities. This study attempted to determine (i) the major sea urchin finfish predators, (ii) the effect of predation on sea-urchin community structure, and (iii) the possible effect of sea urchin increases and finfish decreases on the lagoonal substrate. Six reefs, two protected and four unprotected, were compared for differences in finfish abundance, sea urchin abundance and diversity and substrate cover, diversity and complexity. Comparisons between protected and unprotected reefs indicated that finfish populations were ca. 4 x denser in protected than unprotected reefs. Sea urchin populations were >100 x denser and predation rates on a sea urchin, Echinometra mathaei, were 4 x lower in unprotected than in protected reefs. The balistidae (triggerfish) was the single sea-urchin finfish predator family which had a higher population density in protected than in unprotected reefs. Balistid density was positively correlated with predation rates on tethered E. mathaei (r=0.88; p<0.025) and negatively correlated with total sea-urchin density (r=-0.89; p<0.025) on the six reefs. We conclude from observations that the balistids Balistaphus undulatus and Rhinecanthus aculeatus are the dominant sea-urchin predators. The sea-urchin assemblage had its greatest diversity and species richness at intermediate predation rates and low to intermediate sea-urchin densities. At low predation rates and high sea-urchin density E. mathaei dominated the assemblage's species composition. Preferential predation on the competitive dominant maintains the assemblage's diversity, supporting the compensatory mortality hypothesis (Connell 1978) of coral reef diversity. Protected reefs had greater cover of hard coral, calcareous and coralline algae, and greater substrate diversity and topographic complexity than unprotected reefs which had greater algal turf and sponge cover. Coral cover and topographic complexity were negatively correlated with total sea urchin density. Although experimentation is lacking, these substrate changes may be due to the switch from finfish to sea-urchins as consumers which results from overfishing of finfish. Removal of top invertebrate-eating carnivores appears to have cascading effects on the entire coral reef ecosystem.