||Space limitation in larval settlement can play an important role in the population dynamics of marine species. A novel statistical test for space limitation based on quadrat counts of individuals is described. The test is based on identifying a significant relationship between the relative dispersion of quadrat counts and overall mean density. An application to a time series of quadrat counts of recently settled American lobsters Homarus americanus covering the period 1993-2007 in Casco Bay, Maine, USA (43A degrees 45'N; 69A degrees 58'W), is presented. For this data set, the null hypothesis that space is not limiting could not be rejected (P = 0.10).