© 2016, Springer-Verlag Berlin Heidelberg.Shark sanctuaries are promoted as a management tool to achieve conservation goals following global declines of shark populations. We assessed the status of reef-shark populations and indicators of fishing pressure across the world’s first shark sanctuary in Palau. Using underwater surveys and stereophotogrammetry, we documented large differences in abundance and size structure of shark populations across the sanctuary, with a strong negative relationship between shark densities and derelict fishing gear on reefs. Densities of 10.9 ± 4.7 (mean ± SE) sharks ha-1 occurred on reefs adjacent to the most populated islands of Palau, contrasting with lower densities of 1.6 ± 0.8 sharks ha-1 on remote uninhabited reefs, where surveillance and enforcement was limited. Our observations suggest that fishing still remains a major factor structuring shark populations in Palau, demonstrating that there is an urgent need for better enforcement and surveillance that targets both illegal and licensed commercial fisheries to provide effective protection for sharks within the sanctuary.