The relatively recent fields of terrestrial landscape and marine seascape genetics seek to identify the influence of biophysical habitat features on the spatial genetic structure of populations or individuals. Over the last few years, there has been accumulating evidence for the effect of environmental heterogeneity on patterns of gene flow and connectivity in marine systems. Here, we investigate the population genetic patterns of an anemonefish, Amphiprion bicinctus, along the Saudi Arabian coast of the Red Sea. We collected nearly one thousand samples from 19 locations, spanning approximately 1500 km, and genotyped them at 38 microsatellite loci. Patterns of gene flow appeared to follow a stepping-stone model along the northern and central Red Sea, which was disrupted by a distinct genetic break at a latitude of approximately 19°N. The Red Sea is characterized by pronounced environmental gradients along its axis, roughly separating the northern and central from the southern basin. Using mean chlorophyll-a concentrations as a proxy for this gradient, we ran tests of isolation by distance (IBD, R2 = 0.52) and isolation by environment (IBE, R2 = 0.64), as well as combined models using partial Mantel tests and multiple matrix regression with randomization (MMRR). We found that genetic structure across our sampling sites may be best explained by a combined model of IBD and IBE (Mantel: R2 = 0.71, MMRR: R2 = 0.86). Our results highlight the potential key role of environmental patchiness in shaping patterns of gene flow in species with pelagic larval dispersal. We support growing calls for the integration of biophysical habitat characteristics into future studies of population genetic structure.