The Great Barrier Reef (GBR) shelf contains a range of coral reefs on the highly turbid shallow inner shelf, where interaction occurs with terrigenous sediments. The modern hydrodynamic and sedimentation regimes at Paluma Shoals, a shore-attached ‘turbid-zone’ coral reef, and at Phillips Reef, a fringing reef located 20 km offshore, have been studied to document the mechanisms controlling turbidity. At each reef, waves, currents and near-bed turbidity were measured for a period of ≈1 month. Bed sediments were sampled at 135 sites. On the inner shelf, muddy sands are widespread, with admixed terrigenous and carbonate gravel components close to the reefs and islands, except on their relatively sheltered SW side, where sandy silty clays occur. At Paluma Shoals, the coral assemblage is characteristic of inner-shelf or sheltered habitats on the GBR shelf (dominated by Galaxea fascicularis, up to >50% coral cover) and is broadly similar to that at Phillips Reef, further offshore and in deeper water. The sediments of the Paluma Shoals reef flats consist of mixed terrigenous and calcareous gravels and sands, with intermixed silts and clays, whereas the reef slope is dominated by gravelly quartz sands. The main turbidity-generating process is wave-driven resuspension, and turbidity ranges up to 175 nephelometric turbidity units (NTU). In contrast, at Phillips Reef, turbidity is <15 NTU and varies little. At Paluma Shoals, turbidity of >40 NTU probably occurs for a total of >40 days each year, and relatively little time is spent at intermediate turbidities (15–50 NTU). The extended time spent at either low or high turbidities is consistent with the biological response of some species of corals to adopt two alternative mechanisms of functioning (autotrophy and heterotrophy) in response to different levels of turbidity. Sedimentation rates over periods of hours may reach the equivalent of 10 000 times the mean global background terrigenous flux (BTF) of sediment to the sea floor, i.e. 10 000 BTF, over three orders of magnitude greater than the Holocene average for Halifax Bay of <3 BTF. As elsewhere along the nearshore zone of the central GBR, dry-season hydrodynamic conditions form a primary control upon turbidity and the distribution of bed sediments. The location of modern nearshore coral reefs is controlled by the presence of suitable substrates, which in Halifax Bay are Pleistocene and early Holocene coarse-grained (and relatively stable) alluvial deposits.