The relationship between acoustic backscatter, sediment characteristics and benthic habitat is examined using high-resolution sidescan sonar data collected at the Loch Linnhe artificial reef site on the west coast of Scotland. The site is typical for the continental shelf of NW Europe, with a mix of seabed environments from muddy to coarse, stony substrata on a 10–100 m length scale. A sidescan sonar mosaic was produced and classified according to derived backscatter parameters (mean, median and standard deviation of the backscatter values) using an unsupervised classification procedure. The accuracy of the final classified map was assessed by comparison with a ground-truthing survey in which the biological habitat was derived from underwater video footage. The sidescan correctly predicted seabed surface characteristics of observed biological habitat with 78% accuracy. A second, and more challenging test of the acoustic data to correctly predict biological habitat was made by comparing it with data from 21 grab sampling stations. These stations were divided into three groups using multivariate statistical techniques based on their backscatter properties. Benthic assemblage structure was found to be significantly distinct between the high and low, and the medium and low backscatter stations. There was a low to moderate but significant correlation between the multivariate patterns of acoustic backscatter, benthic assemblage structure, and particle size distribution. The work shows that even in areas with subtle and gradational changes in substratum, the sidescan was able to predict biological community with an acceptable accuracy.