Declines in coral cover are generally associated with increases in the abundance of fleshy algae. In many cases, it remains unclear whether algae are responsible, directly or indirectly, for coral death or whether they simply settle on dead coral surfaces. Here, we show that algae can indirectly cause coral mortality by enhancing microbial activity via the release of dissolved compounds. When coral and algae were placed in chambers together but separated by a 0.02 μm filter, corals suffered 100% mortality. With the addition of the broad-spectrum antibiotic ampicillin, mortality was completely prevented. Physiological measurements showed complementary patterns of increasing coral stress with proximity to algae. Our results suggest that as human impacts increase and algae become more abundant on reefs a positive feedback loop may be created whereby compounds released by algae enhance microbial activity on live coral surfaces causing mortality of corals and further algal growth.