Abstract Completely banning fishing from coral reefs is now accepted to have significant benefits for marine biodiversity and in many cases, fisheries. However, the benefits of regulating fishing on coral reefs, by restricting the methods used, or the total amount of fishing, are less well understood, even though such regulations are much more likely to be supported by fishermen. This study assesses whether banning illegal, destructive fishing methods and reducing the numbers of fishermen visiting from outside an area benefits a coral reef fishery, despite unregulated fishing by local fishermen using non‐destructive methods. The abundance, biomass, mean length, and species richness of nine commercially important fish families are compared across ten independent patch reefs inside and outside the 470 km2 Menai Bay Conservation Area in Zanzibar, Tanzania. Even after taking into account the effect of differences in habitat and the distance between reefs, 61% (±19.7%) more fish species were found in regulated than unregulated reefs. Fish abundance, biomass, and length were not affected, suggesting that banning destructive fishing may improve biodiversity, but that further regulations may be required to improve fish stocks.Copyright © 2011 John Wiley & Sons, Ltd.