Around the world, the decreasing health of coral reef ecosystems has highlighted the need to better understand the processes of reef degradation. The development of more sensitive tools, which complement traditional methods of monitoring coral reefs, may reveal earlier signs of degradation and provide an opportunity for pre-emptive responses. We identify new, sensitive metrics of ecosystem processes and benthic composition that allow us to quantify subtle, yet destabilizing, changes in the ecosystem state of an inshore coral reef on the Great Barrier Reef. Following severe climatic disturbances over the period 2011-2012, the herbivorous reef fish community of the reef did not change in terms of biomass or functional groups present. However, fish-based ecosystem processes showed marked changes, with grazing by herbivorous fishes declining by over 90%. On the benthos, algal turf lengths in the epilithic algal matrix increased more than 50% while benthic sediment loads increased 37-fold. The profound changes in processes, despite no visible change in ecosystem state, i.e., no shift to macroalgal dominance, suggest that although the reef has not undergone a visible regime-shift, the ecosystem is highly unstable, and may sit on an ecological knife-edge. Sensitive, process-based metrics of ecosystem state, such as grazing or browsing rates thus appear to be effective in detecting subtle signs of degradation and may be critical in identifying ecosystems at risk for the future.