Globally, coral reefs are under threat, with many exhibiting degradation or a shift towards algal-dominated regimes following marine heat waves, and other disturbance events. Marginal coral reefs existing under naturally extreme conditions, such as turbid water reefs, may be more resilient than their clear water counterparts as well as offer some insight into how reefs could look in the future under climate change. Here, we surveyed 27 benthic habitats across an environmental stress gradient in the Exmouth Gulf region of north Western Australia immediately following a marine heatwave event. We used multidecadal remotely sensed turbidity (from an in-situ validated dataset) and temperature, to assess how these environmental drivers influence variability in benthic communities and coral morphology. Long-term turbidity and temperature variability were associated with macroalgal colonisation when exceeding a combined threshold. Coral cover was strongly negatively associated with temperature variability, and positively associated with depth, and wave power, while coral morphology diversity was positively associated with turbidity. While moderate turbidity (long-term average ~ 2 mg/L suspended matter) appeared to raise the threshold for coral bleaching and macroalgal dominance, regions with higher temperature variability (> 3.5 °C) appeared to have already reached this threshold. The region with the least turbidity and temperature variability had the highest amount of coral bleaching from a recent heatwave event and moderate levels of both these variables may confer resilience to coral reefs.