Coral reefs experience numerous environmental gradients affecting organismal physiology and species biodiversity, which ultimately impact community metabolism. This study shows that submarine groundwater discharge (SGD), a common natural environmental gradient in coastal ecosystems associated with decreasing temperatures, salinity and pH with increasing nutrients, has both direct and indirect effects on coral reef community metabolism by altering individual growth rates and community composition. Our data revealed that SGD exposure hindered the growth of two algae, and by 67 and 200%, respectively, and one coral, by 20%. Community metabolic rates showed altered community production, respiration and calcification between naturally high and low exposure areas mostly due to differences in community identity (i.e. species composition), rather than a direct effect of SGD on physiology. Production and calcification were 1.5 and 6.5 times lower in assemblages representing high SGD communities regardless of environment. However, the compounding effect of community identity and SGD exposure on respiration resulted in the low SGD community exhibiting the highest respiration rates under higher SGD exposure. By demonstrating SGD's role in altering community composition and metabolism, this research highlights the critical need to consider compounding environmental gradients (i.e. nutrients, salinity and temperature) in the broader context of ecosystem functions.