Restoration and maintenance of barrier islands to preserve structural integrity and protect against erosional forces is a common goal of coastal protection. An assessment of restored barrier islands for their suitability as wildlife habitat is crucial for improvement of restoration methods and conservation of barrier-island-dwelling species, especially ground-nesting waterbirds. During the 2008 and 2009 breeding periods, we conducted a quantitative assessment of colonial waterbird use of the Isles Dernieres Barrier Island Refuge (IDBIR), Louisiana, which has experienced several restoration projects since the early 1990s, to understand the breeding ecology of two terns in the genus Thalasseus and investigated why some restored areas have not been colonized. Our objectives were to determine hatching success of the two species, identify important habitat characteristics for their reproduction and colony formation, and evaluate the success of past restoration efforts in providing suitable nesting habitat. Habitat characteristics were important for hatching success, including spatial attributes of nest sites and substrate composition. Discriminant function analysis revealed that suitable habitat for colony formation was available at some inactive restored areas, but the majority of inactive areas were unsuitable. The paucity of nesting activity at potentially suitable restored areas may be attributable to the greater activity of mammalian predators that we detected at inactive areas than at active colony sites. Management of restored barrier islands for specific waterbird habitat requirements, creation of new islands containing suitable ground-nesting habitat, and appropriate control of mammalian predators are critical factors for effective waterbird conservation and ecosystem function in these disturbance-prone regions.