The continuous release of organic C-rich material by reef-building corals can contribute substantially to biogeochemical processes and concomitant rapid nutrient recycling in coral reef ecosystems. However, our current understanding of these processes is limited to platform reefs exhibiting a high degree of ecosystem closure compared to the globally most common fringing reef type. This study carried out in the northern Gulf of Aqaba (Red Sea) presents the first quantitative budget for coral-derived organic carbon (COC) in a fringing reef and highlights the importance of local hydrodynamics. Diel reef-wide COC release amounted to 1.1 ± 0.2 kmol total organic carbon (TOC) representing 1-3% of gross benthic primary production. Most COC (73%) was released as particulate organic C (POC), the bulk of which (34-63%) rapidly settled as mucus string aggregates accounting for approximately 28% of total POC sedimentation. Sedimentation of mucus strings, but also dilution of suspended and dissolved COC in reef waters retained 82% of diel COC release in the fringing reef, providing a potentially important organic source for a COC-based food web. Pelagic COC degradation represented 0.1-1.6% of pelagic microbial respiration recycling 32% of diel retained COC. Benthic COC degradation contributed substantially (29-47%) to reef-wide microbial respiration in reef sands, including 20-38% by mucus string POC, and consumed approximately 52% of all retained COC. These findings point out the importance of COC as a C carrier for different reef types. COC may further represent a source of organic carbon for faunal communities colonising reef framework cavities complementing the efficient retention and recycling of COC within fringing reef environments. © 2012 Elsevier B.V.