The United States submarine Memphis grounded in approximately 10 m water depth on a tropical coral reef ofT southeast Florida in February, 1993. The grounding caused extensive physical and biological damage to the reef substrate and to the coral community. As part of a claim by the State of Florida against the United States, the impact of the grounding was assessed, and the area of damage was determined through field and photographic studies. A recovery rate for the reef was assigned from literature estimates. The NOAA Habitat Equivalency Model (HEM) was used to calculate the reef area needed to be replaced in order to compensate for damages. A plan devised to restore the reef included: removal of loose rubble generated from the grounding; stabilization of reef faces in danger of collapse: emplacement of six different types of artificial reefs; transplantation of reef-building corals (15% of the number damaged) to bare damaged substrate and to the artificial reefs; and a 20 year monitoring period to assess restoration plan efficacy. Settlement of the claim in April, 1997 resulted in an award of $750,000 to the Ecosystem Management Trust Fund of the State of Florida. Utilization of this fund necessitates a revised plan to restore the damaged reef within economic constraints. This plan will involve rubble removal/stabilization, artificial reef emplacement, stony coral transplantation, and monitoring.