Fish assemblages of different types of artificial reefs can differ greatly in abundance, biomass and composition, with some reef types harboring over five times more herbivores than others. It is assumed that higher herbivorous fish abundance results in a higher grazing intensity, affecting the benthic community by means of enhanced coral recruitment, survival and growth. Territorial fish species might affect this process by chasing away other fish, especially herbivores. In this study we compared the fish assemblage, territorial behavior and grazing intensity by fish on two artificial reef types: reef balls and layered cakes, differing greatly in their fish assemblage during early colonization. In addition, the effect of artificial reef type on benthic development and coral recruitment, survival and growth, was investigated. Although layered cakes initially harbored higher herbivorous fish biomass, this effect was lost during consecutive monitoring events. This seems to be the result of the higher territorial fish abundance around the layered cakes where almost four times more chasing behavior was recorded compared to the reef balls. This resulted in a more than five times lower fish grazing intensity compared to the reef-ball plots. Although macroalgae were effectively controlled at both reefs, the grazing intensity did not differ enough to cause large enough structural changes in benthic cover for higher coral recruitment, survival or growth. The high turf algae cover, combined with increasing crustose coralline algae and sponge cover likely explained reduced coral development. We recommend further research on how to achieve higher grazing rates for improved coral development on artificial reefs, for example by facilitating invertebrate herbivores.