Benthic foraminifera (BF) are utilized in palaeo-environmental reconstruction based on our understanding of how living individuals respond to environmental variations. However, there is still a lack of empirical insight into how non-environmental factors, such as taphonomic processes, influence the preservations of fossil BF in strata. In this study, we compare the spatial distribution and composition of alive and dead BF fauna in surface sediments to elucidate how well fossil foraminiferal fauna mirror quasi-contemporary alive BF groups indicative of different water masses off a mega-river (Changjiang) estuary, which is characterized by intense and complex river-sea interactions. On-site measurements of bottom water salinity, temperature, and dissolved oxygen were conducted in the summer to determine water mass properties. A same-site comparison of alive (Rose Bengal stained) and dead foraminiferal fauna in surface sediment samples over 73 stations was then carried out. Q-mode Hierarchical clustering analysis was used to differentiate foraminiferal assemblages based on the relative abundance of common species. Three distinct regions with different water-mass properties were identified. The distribution pattern of dead foraminiferal fauna is mainly inherited from alive fauna, while the density and diversity of the dead fauna were found to be higher than those of the alive one. Both alive and dead fauna were clustered into four assemblages. A few common alive species (small-agglutinated and thin-calcareous) were rarely found in dead fauna, and a few common dead species (preferring low temperature and indicating allochthonous sources) were rarely present in alive fauna. The alive foraminiferal abundance and diversity were mainly determined by food resources and environmental properties of salinity and temperature. Alive foraminiferal assemblages were separated by different water masses determined by river-sea interactions off the Changjiang Estuary. The “time-averaging” effect was found to be responsible for the higher density and diversity of the dead fauna. Disintegration of agglutinated tests, dissolution of calcareous tests and selective transportation were observed to contribute to the different species compositions between the alive and dead fauna. Nevertheless, indicative species-environment relations in alive and taphocoenose fauna were found to be almost homologous among most common species. This suggests that distinct benthic foraminiferal assemblages can be used to effectively differentiate between different water masses in the study coastal seas.