We evaluated the relationship between environmental indices and succession in the algal communities of artificial reefs near Lidao, Rongcheng. We documented species diversity and biomass on a quarterly basis between August 2009 and August 2010, about 3 years after the reefs were installed. We documented thirteen algal species belonging to three divisions. Of these, six species belonging to Rhodophyta dominated the flora numerically. Conversely, Phaeophyta had the highest biomass density (92.724 g/m²) The algal community had reached maturity after three years of development. The number of species and biomass were higher in summer and autumn than in spring and winter. Both cluster analysis and detrending correspondence analysis revealed 83.1% similarity between algal communities in rock reefs and natural reefs. Both the biomass and diversity index were higher in algal communities in rock and natural reefs than in concrete reefs. PCA and DCA analysis suggested that temperature was the major environmental factor affecting the algal communities, explaining 47.6% of the variation. Nitrogen and phosphorus constituted secondary factors in the natural reef area whereas pH and dissolved oxygen (DO) levels were secondary in artificial reef areas.