Comparisons between historical and recent ecological datasets indicate that shallow reef habitats across the central Galapagos Archipelago underwent major transformation at the time of the severe 1982/1983 El Niño warming event. Heavily grazed reefs with crustose coralline algae (‘urchin barrens’) replaced former macroalgal and coral habitats, resulting in large local and regional declines in biodiversity. Following recent threat assessment workshops, a total of five mammals, six birds, five reptiles, six fishes, one echinoderm, seven corals, six brown algae and nine red algae reported from coastal environments in Galapagos are now recognized as globally threatened. The 2008 International Union for the Conservation of Nature (IUCN) Red List includes 43 of these species, while two additional species (Galapagos damsel Azurina eupalama and 24-rayed sunstar Heliaster solaris) not seen for > 25 years also fulfil IUCN threatened species criteria. Two endemic species (Galapagos stringweed Bifurcaria galapagensis and the damselfish A. eupalama) are now regarded as probably extinct, while an additional six macroalgal species (Dictyota galapagensis, Spatoglossum schmittii, Desmarestia tropica, Phycodrina elegans, Gracilaria skottsbergii and Galaxaura barbata) and the seastar H. solaris are possibly extinct. The removal of large lobster and fish predators by artisanal fishing probably magnified impacts of the 1982/1983 El Niño through a cascade of indirect effects involving population expansion of grazing sea urchins. Marine protected areas with adequate enforcement are predicted to ameliorate but not eliminate ecosystem impacts caused by increasing thermal anomalies associated with El Niño and global climate change.