The design of marine reserves is complex and fraught with uncertainty. However, protection of critical habitat is of paramount importance for reserve design. We present a case study as an example of a reserve design based on fine-scale habitats, the affinities of exploited species to these habitats, adult mobility, and the physical forcing affecting the dynamics of the habitats. These factors and their interaction are integrated in an algorithm that determines the optimal size and location of a marine reserve for a set of 20 exploited species within five different habitats inside a large kelp forest in southern California. The result is a reserve that encompasses similar to 42% of the kelp forest. Our approach differs fundamentally from many other marine reserve siting methods in which goals of area, diversity, or biomass are targeted a priori. Rather, our method was developed to determine how large a reserve must be within a specific area to protect a self-sustaining assemblage of exploited species. The algorithm is applicable across different ecosystems, spatial scales, and for any number of species. The result is a reserve in which habitat value is optimized for a predetermined set of exploited species against the area left open to exploitation. The importance of fine-scale habitat definitions for the exploited species off La Jolla is exemplified by the spatial pattern of habitats and the stability of these habitats within the kelp forest, both of which appear to be determined by ocean microclimate.