Herbivores play an integral part in maintaining the health of coral reefs by suppressing the growth of algae and accumulation of sediment and facilitating coral growth. However, in predator-depleted systems where densities of herbivores are unnaturally high, grazing can have detrimental effects on corals through excessive bioerosion. Yet, these benefits and costs are rarely investigated concurrently, especially in eutrophic systems where grazers may play a disproportionate role. We used a year-long exclusion experiment to elucidate the effect of natural densities of the dominant herbivore (the sea urchin Diadema setosum) on coral communities in a heavily fished and eutrophic system (Hong Kong, China). To assess benthic community response to grazing, we monitored the survival and growth of three locally abundant coral species (Pavona decussata, Platygyra carnosus and Porites sp.), algal and sediment accumulation, and bioerosion of coral skeletons across seasons. We found that urchins maintained our experimental coral assemblages, and when excluded, there was a 25 to 75-fold increase in algal-sediment matrix accumulation. Contrary to predictions, there was no general response of corals to urchin presence; Porites sp. survivorship increased while P. decussata was unaffected, and growth rates of both species was unchanged. Surprisingly, P. carnosus experienced higher mortality and bioerosion of up to 33% of their buoyant weight when urchins were present. Therefore, under natural densities, sea urchins clear substrate of algae and sediment, increase survival, maintain growth rates and health of coral assemblages, yet can accelerate the bioerosion of species with porous skeletons following mortality.