Ocean warming is driving rapid poleward expansion of tropical marine organisms, particularly in areas surrounding poleward flowing ocean currents. Each summer the East Australian Current transports fish larvae from tropical latitudes to temperate coastal and offshore locations. Increasing water temperatures are likely to reduce the physiological constraints for tropical fishes at higher latitudes, however little is known about the importance of habitat in the early establishment of such species. Here, we investigate the role of benthic composition and habitat characteristics in structuring reef fish assemblages across a tropical to temperate gradient, spanning 17 degrees of latitude along the east coast of Australia. Variation in fish assemblages among latitudinal locations was closely linked with benthic composition, especially for fishes of tropical affiliation, whereas habitat complexity only played a minor role. Results also suggest that generalist fish species are more likely to colonise temperate reefs, while species with highly specialised habitat requirements are less likely to successfully colonise high latitude environments. Our findings highlight the influence of local benthic composition in determining which tropical fish species may successfully establish populations in temperate environments in the future.