The United States submarine Memphis grounded in approximately 10 m depth on a coral reef off southeast Florida in February, 1993. The grounding caused extensive physical damage to the reef substrate and biological damage to the coral community. As part of a claim by the State of Florida against the United States Government, the impact of the grounding was assessed, and the area of damage was determined through field and photographic studies. The NOAA Habitat Equivalency Model (HEM) was used to calculate the reef area to be replaced 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 reef modules; transplantation of stony corals (15% of the number lost) 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 involves rubble stabilization, artificial reef emplacement, stony coral transplantation, and monitoring.