Manicina areolata is widespread across the Caribbean region.
Unlike most other so-called 'reef corals' (Diploria labyrinthiformis), Manicina areolata usually does not live on coral reefs, but instead prefers shallow, productive nearshore habitats characterized by abundant sediments such as seagrass meadows or along the fringes of mangrove forests.
In these habitats, Manicina areolata is an important part of the 'soft-bottom' coral community that also contains species such as Siderastrea radians (the golf-ball coral) and Porites furcata (finger coral). These corals have special morphological or behavioral characteristics that allow them to thrive in habitats where other species would be smothered in sediments (see Behaviour section).