Since about 2000, octocorals on the shallow reefs of St. John, US Virgin Islands, have increased in abundance to form dense stands analogous to terrestrial forests. In this study, the ecology of octocoral forests was explored by testing for an effect of their canopies on the light regime and benthic invertebrate community in the understory habitat. Octocoral forests at five sites (7–13 m depth) were quantified on a spatial scale of meters by the height and density of octocoral colonies. Their effects on the understory habitat were evaluated through measurements of downwelling light, benthic invertebrate community structure, and the photophysiology (i.e., induction time) of the common coral, Porites astreoides (Lamarck, 1816). Octocoral forests composed of dense (> 5 octocorals m−2) and tall (mean height of 42 cm) octocoral colonies created an understory habitat characterized by flashes of bright light (i.e., sunflecking). Within the understory habitat at two of three study sites, the community structure of benthic invertebrates was modified by the octocoral canopy, but it remained unaffected at a third site. A test for the effects of sunflecking on the induction time of P. astreoides found no difference between colonies in the understory versus the open reef habitat. These results do not support the notion that the physiological phenotype of autotrophs in the understory habitat is modified to exploit sunflecking. The analysis of the benthic invertebrates in the understory habitat suggests that octocoral forests can change the community structure of this group of organisms, relative to the open reef. The causes of this change are unclear, but its absence at the most sheltered study site suggests that water motion may be a contributing factor. The strong likelihood that octocoral forests mediate ecologically significant changes in the community structure of invertebrates within their understory habitat warrants further investigation.