Pollution, fishing, and outbreaks of predators can heavily impact coastal coral reef ecosystems, leading to decreased water quality and benthic community shifts. To determine the main environmental drivers of coral reef status in the Spermonde Archipelago, Indonesia, we monitored environmental variables and coral reef benthic community structure along an on-to-offshore gradient annually from 2012 to 2014. Findings revealed that concentrations of phosphate, chlorophyll a-like fluorescence, suspended particulate matter, and light attenuation significantly decreased from on-to-offshore, while concentrations of dissolved O2 and values of water pH significantly increased on-to-offshore. Nitrogen stable isotope signatures of sediment and an exemplary common brown alga were significantly enriched nearshore, identifying wastewater input from the city of Makassar as primary N source. In contrast to the high temporal variability in water quality, coral reef benthic community cover did not show strong temporal, but rather, spatial patterns. Turf algae was the dominant group next to live coral, and was negatively correlated to live coral, crustose coralline algae (CCA), rubble and hard substrate. Variation in benthic cover along the gradient was explained by water quality variables linked to trophic status and physico-chemical variables. As an integrated measure of reef status and structural complexity, the benthic index, based on the ratio of relative cover of live coral and CCA to other coral reef organisms, and reef rugosity were determined. The benthic index was consistently low nearshore and increased offshore, with high variability in the midshelf sites across years. Reef rugosity was also lowest nearshore and increased further offshore. Both indices dropped in 2013, increasing again in 2014, indicating a period of acute disturbance and recovery within the study and suggesting that the mid-shelf reefs are more resilient to disturbance than nearshore reefs. We thus recommend using these two indices with a selected number of environmental variables as an integral part of future reef monitoring.