Knowledge of the spatial and temporal distribution of juvenile cod is essential to closing the life cycle in population dynamic models, and it is a prerequisite for the design of Marine Protected Areas (MPAs) aiming at the protection of juveniles. In this study, we use a hydrodynamic model to examine the spatial distribution of eastern Baltic cod larvae and early juveniles. The transport patterns of the larvae spawned at the three major spawning grounds in the central Baltic Sea were investigated by drift model simulations for the period 1979–2004. We analysed potential habitats for their suitability for juvenile settlement, i.e. the change from pelagic to demersal life. The results revealed a clear dependence of the probability for successful settling on wind-induced drift of larval cod, which is controlled by the local atmospheric conditions over the Baltic Sea. Furthermore, we found evidence that the final destinations of juvenile cod drift routes are affected by decadal climate variability. Application of the methodology to MPA design is discussed, e.g. identifying the overlap of areas with a high probability of successful juvenile cod settlement and regions of high fishing effort in small-meshed fisheries targeting sprat and herring.