Optimizing habitat restoration success requires understanding how restoration location and design enhance the persistence and function of a restored habitat. Particular attention to the configuration of structure and its interaction with landscape‐scale processes is critical for enhancing the habitat value of restored areas. We monitored six subtidal restored oyster reefs in Pamlico Sound, North Carolina, United States, to identify how oyster demographics responded to initial habitat characteristics (e.g. reef area, volume, vertical relief, and perimeter‐to‐area ratio) and how changes in habitat characteristics over time altered suitability for oysters. Changes in reef habitat were measured by repeated mapping using bathymetric and side‐scanning sonar systems. A 2‐year time series of oyster demographic data quantified oyster response to habitat changes over time. All reefs provided habitat for the settlement and growth of oysters. Within 2 years of restoration, relative differences in oyster recruitment and survival emerged and were related to variations in reef location and two‐dimensional habitat characteristics among reefs, namely reef area and perimeter‐to‐area ratio. Larger reefs that were less fragmented resisted burial from sedimentation and enhanced oyster densities and biomass relative to smaller, more fragmented reefs that became heavily sedimented and failed to support oyster recruitment and survival. Positive feedback mechanisms between habitat characteristics and oyster recruitment success were established within 1 year of restoration and were likely driven by landscape‐scale processes such as sediment dynamics and larval supply. To improve restoration success, we recommend creating larger reef surfaces with low perimeter‐to‐area ratios in areas that promote habitat persistence.