Coral bleaching and mortality are predicted to increase as climate change-induced thermal-stress events become more frequent. Although many studies document coral bleaching and mortality patterns, few studies have examined deviations from the expected positive relationships among thermal stress, coral bleaching, and coral mortality. This study examined the response of >30,000 coral colonies at 80 sites in Palau, during a regional thermal-stress event in 2010. We sought to determine the spatial and taxonomic nature of bleaching and examine whether any habitats were comparatively resistant to thermal stress. Bleaching was most severe in the northwestern lagoon, in accordance with satellite-derived maximum temperatures and anomalous temperatures above the long-term averages. Pocillopora populations suffered the most extensive bleaching and the highest mortality. However, in the bays where temperatures were higher than elsewhere, bleaching and mortality were low. The coral-community composition, constant exposure to high temperatures, and high vertical attenuation of light caused by naturally high suspended particulate matter buffered the corals in bays from the 2010 regional thermal-stress event. Yet, nearshore reefs are also most vulnerable to land-use change. Therefore, nearshore reefs should be given high conservation status because they provide refugia for coral populations as the oceans continue to warm.