Current theory predicts that in low-density, seed-limited plant populations, seed predation will be more important than competition in determining the number of individuals that reach maturity. However, when plant density is high, competition for microsites suitable for establishment and growth is expected to have a relatively greater effect. This dichotomous perspective does not account for situations in which the risk of seed predation differs inside versus outside recruitment microsites. We report the results of a field experiment and sampling studies that demonstrate such an interaction between microsite quality and the risk of propagule predation in mangrove forests on the Caribbean coast of Panama, where it appears to play a key role in shaping the demography and dynamics of the mangrove, Rhizophora mangle. Rhizophora's water-borne propagules establish wherever they strand, but long-term sampling revealed that only those that do so in or near lightning-created canopy gaps survive and grow to maturity. These microsites afford better growth conditions than the surrounding understory and, as importantly, provide a refuge from predation by the scolytid beetle, Coccotrypes rhizophorae. This refuge effect was confirmed with a field experiment in which Rhizophora seedlings were planted at different positions relative to gap edges, from 5 m inside to 20 m outside the gap. Mortality due to beetle attack increased linearly from an average of 10% inside a gap to 72% at 20 m into the forest. The interaction between canopy disturbance and propagule predation may be having a large impact on the composition of our study forests. Being shade-tolerant, Rhizophora seedlings that escape or survive beetle attack can persist in the understory for years. However, the high rate of beetleinduced mortality effectively eliminates the contribution of advance regeneration by Rhizophora saplings to gap succession. This may explain why the shade-intolerant mangrove, Laguncularia racemosa, is able to co-dominate the canopy in low intertidal forests at our study sites.