AbstractCoral reef islands are biodiversity hotspots with high conservation value, but we have a poor understanding of how island vegetation, through transpiration, influences groundwater nutrient supply to adjacent reef systems. Here we combine stable isotope tracing, geophysical surveys, and satellite analysis to unravel the links between transpiration and the discharge of groundwater nitrate to the waters surrounding a coral reef island (Lady Elliot Island in the Great Barrier Reef). Over a 2‐year study period (2020–2021) there was a net loss of freshwater from the island, that is, evapotranspiration (ET) exceeded rainfall, largely caused by high rates of transpiration (73% of ET). Transpiration was higher in forested areas, and groundwater salinity appeared to be higher there. By tracing the nitrogen stable isotope signature of groundwater nitrate into reef organism tissue we were able to map groundwater nitrogen discharge spatially and temporally. Groundwater nitrogen discharge was focussed on one side of the island and did not vary seasonally as expected, despite reduced rainfall and seabird guano inputs over the austral winter/spring. Based on our results, we propose that transpiration by island vegetation slows groundwater flow and concentrates nitrate in the groundwater being released to the surrounding reef system. High concentrations of nitrate in groundwater (up to 27 mmol L−) were observed on Lady Elliot Island and these seem to have increased since 2014, but further work is required to understand if this is a normal scenario for tropical coral islands or the result of the islands' revegetation program.