In the Central Red Sea, healthy coral reefs meet intense coastal development, but data on the effects of related stressors for reef functioning are lacking. This in situ study therefore investigated the independent and combined effects of simulated overfishing through predator/grazer exclusion and simulated eutrophication through fertilizer addition on settlement of reef associated invertebrates on light-exposed and -shaded tiles over 4 months. At the end of the study period invertebrates had almost exclusively colonized shaded tiles. Algae were superior settling competitors on light-exposed tiles. On the shaded tiles, simulated overfishing prevented settlement of hard corals, but significantly increased settlement of polychaetes, while simulated eutrophication only significantly decreased hard coral settlement relative to controls. The combined treatment significantly increased settlement of bryozoans and bivalves compared to controls and individual manipulations, but significantly decreased polychaetes compared to simulated overfishing. These results suggest settlement of polychaetes and hard corals as potential bioindicators for overfishing and eutrophication, respectively, and settlement of bivalves and bryozoans for a combination of both. Therefore, if the investigated stressors are not controlled, phase shifts from dominance by hard corals to that by other invertebrates may occur at shaded reef locations in the Central Red Sea.