Coral reefs are severely threatened by global and local disturbances that can shift reefs from coral to algal dominance. Coral-macroalgae competition is expected to exacerbate coral decline as the interactions increase in frequency. Whereas numerous studies over the last decade have aimed to characterize the interactions and impacts on coral growth and physiology, the underlying mechanisms remain controversial. This study tested the impact of different macroalgal species, densities, and contact status with corals on the physiological response of corals in Sanya Reefs. The results revealed that direct contact with increasing densities of fleshy macroalgae had a negative impact on the photosynthesis, growth rate, and tissue biomass of the two common corals. However, calcified macroalgae did not significantly affect the corals, regardless of whether there was direct contact or not. Under the same conditions, Acropora intermedia appeared to be more susceptible to fleshy macroalgae compared to Porites lutea. This suggested that different corals varied in their susceptibility to various macroalgae. Additionally, the results of the generalized linear mixed model revealed that macroalgal species and contact status with corals were the most important predictors of the impacts of macroalgae on corals, and macroalgal density was another nonnegligible parameter. Overall, macroalgae may have caused a potential functional shift in the composition of coral assemblages on the Sanya reefs by further reducing the already depauperate reef-building coral populations. The negative impacts of macroalgae in Sanya Reefs may serve as an early warning that the persistence of the invaluable ecological functions provided by coral reefs will be increasingly threatened throughout the South China Sea. Our findings could contribute to improving the scientific and effective management practices, fostering sustainable coral reef development in China and beyond.