Due to increasing frequency of disturbances to shallow reefs, it has been suggested that Mesophotic Coral Ecosystems (MCEs, 30–150 m depth) may serve as a refuge for corals and a source of larvae that can facilitate the recovery of shallow degraded reefs. As such, they have received increased attention in the past decade, yet remained understudied regarding recruitment dynamics. Here we describe coral recruitment dynamics on settlement tiles and their adjacent natural habitats (10 m vs. 50 m depths) in Eilat, over a period of 5.5 years. The tiles were deployed along three sites onto 18 racks (3 at each depth and at each site). Recruitment patterns varied both temporally and spatially, ending up to two-fold higher juvenile density and higher recruitment rates at mesophotic sites. Settlement surface preference changed with depth, favoring exposed surfaces in mesophotic waters and cryptic surfaces in shallow waters. Juvenile assemblages differed between depths and were distinct from adjacent natural habitats. Over half of the recruited genera overlapped between depths. We suggest that Eilat MCEs serve as a larval sink, providing settlement grounds for shallow-reef propagules. In view of their significance, we call for the protection of these unique and distinct deep-reef habitats.