The flow of ecosystem services from coral reefs, seagrass meadows and mangrove forests sustains the livelihoods of billions of people worldwide. Faced with the global degradation of marine and coastal ecosystems, policy makers are increasingly focusing on ecosystem service valuation techniques to encourage conservation and sustainable use of marine resources. Here we provide a review and synthesis of the available information on economic valuation techniques as applied to tropical marine habitats. Our study demonstrates the high variability and lack of consistency in outcomes from these studies. We conclude that, if the concept of ecosystem goods and services is to make a positive contribution towards managing the impacts of humans on the environment, then economic valuation approaches must reflect the inherent limitations of economic theory whilst emphasizing the complexity and heterogeneity of the natural environment and human decision making.