The potential of corals to associate with more temperature-tolerant strains of algae (zooxanthellae, Symbiodinium) can have important implications for the future of coral reefs in an era of global climate change. In this study, the genetic identity and diversity of zooxanthellae was investigated at three reefs with contrasting histories of bleaching mortality, water temperature and shading, in the Republic of Palau (Micronesia). Single-stranded conformation polymorphism and sequence analysis of the ribosomal DNA internal transcribed spacer (ITS)1 region was used for genotyping. A chronically warm but partly shaded coral reef in a marine lake that is hydrographically well connected to the surrounding waters harboured only two single-stranded conformation polymorphism profiles (i.e. zooxanthella communities). It consisted only of Symbiodinium D in all 13 nonporitid species and two Porites species investigated, with the remaining five Porites harbouring C•. Despite the high temperature in this lake (> 0.5° above ambient), this reef did not suffer coral mortality during the (1998) bleaching event, however, no bleaching-sensitive coral families and genera occur in the coral community. This setting contrasts strongly with two other reefs with generally lower temperatures, in which 10 and 12 zooxanthella communities with moderate to low proportions of clade D zooxanthellae were found. The data indicate that whole coral assemblages, when growing in elevated seawater temperatures and at reduced irradiance, can be composed of colonies associated with the more thermo-tolerant clade D zooxanthellae. Future increases in seawater temperature might, therefore, result in an increasing prevalence of Symbiodinium phylotype D in scleractinian corals, possibly associated with a loss of diversity in both zooxanthellae and corals.