We describe fish assemblages from the Carboniferous (mid- to late Tournaisian) Ballagan Formation at two localities, Hawk's Nib and Mill Hole, on the Isle of Bute, Scotland. Fossil material occurs in thin, locally reworked dolomitic limestone beds, interpreted as the deposits of very shallow lakes or lagoons, developed on, or adjacent to, a seasonally dry coastal plain. The mostly disarticulated fossils comprise isolated teeth, mandibles, scales, tesserae, dermal bones, lepidotrichia and vertebrae. The fauna includes rhizodonts (cf. Archichthys portlocki, cf. Strepsodus sauroides), lungfish (Sagenodus sp.), other sarcopterygians (Megalichthys sp.), one shark (Ageleodus pectinatus), climatiiform acanthodians and indeterminate actinopterygians. The Mill Hole assemblage is especially noteworthy because it includes some putative juvenile forms (Archichthys and Sagenodus). A critical review of the habitat preferences of the documented taxa suggests that most were either euryhaline or, in the case of Archichthys, probably endemic to brackish or freshwater settings. The Bute fish beds fall within a crucial evolutionary period during which many fish and other animal groups were infiltrating nonmarine environments, either passively or actively. It may be that lakes and lagoons may have functioned as protected nurseries for juveniles during this wave of colonization.