The Australian bridled goby (Arenigobius bifrenatus) has been in New Zealand since 1996, and has subsequently spread to thirteen estuaries and the coastal Otara Lake. The native exquisite goby (Favonigobius exquisitus) may be displaced or threatened by the bridled goby as they share estuarine habitat. The ecophysiological tolerances and sediment preferences for both goby species were examined to determine the potential for niche overlap and habitat selection. The results of acute salinity and temperature tolerance tests supported the hypotheses that bridled gobies are more tolerant than exquisite gobies to extremes of salinity and temperature. The incipient ten day LT50 values were 6.7 C and 11.8 C for bridled and exquisite gobies, respectively, however, both tolerated temperatures up to 35 C. Both species showed some mortality at low salinities, but mortality did not exceed 50% for either species at the lowest salinity tested (2.2 ppt) after 96 h. Bridled gobies displayed a strong preference for fine sediment (less than 63 um), whereas exquisite gobies were less selective, accepting a broad range of sediment grain sizes (63-250 um). Bridled gobies have successfully established and dispersed in New Zealand, and their ecophysiological adaptations that allowed them to survive harsh conditions in ballast water, their presumed introduction vector, will likely aid their future spread throughout New Zealand. Their increasing abundance is likely to see them encounter and possibly encroach on the habitat of exquisite gobies. Bridled gobies may displace the smaller exquisite gobies from optimal habitats, as exquisite gobies are unlikely to survive competition from and predation by bridled gobies. However, exquisite gobies should be able to relocate to adjacent habitat with coarse sediment that is unsuitable for burrow construction by bridled gobies. Additionally, acclimatisation to local environmental conditions may extend the tolerance limits determined in this thesis, and may allow bridled gobies to spread to upstream zones in estuaries and occupy freshwater. New Zealand presently has eight recognised gobiid species of which one is endemic, two are native, two are not recorded in mainland waters and three are proposed as non-indigenous. Additionally, several tropical and subtropical gobies exist in the aquarium trade. Similar ecophysiological tests of tolerance and preference may determine the possibility that these species could establish in the wild following accidental release.