Coral reefs persist in an accretion-erosion balance, which is critical for understanding the natural variability of sediment production, reef accretion, and their effects on the carbonate budget. Bioerosion (i.e. biodegradation of substrate) and encrustation (i.e. calcified overgrowth on substrate) influence the carbonate budget and the ecological functions of coral reefs, by substrate formation/consolidation/erosion, food availability and nutrient cycling. This study investigates settlement succession and carbonate budget change by bioeroding and encrusting calcifying organisms on experimentally deployed coral substrates (skeletal fragments of Stylophora pistillata branches). The substrates were deployed in a marginal coral reef located in the Gulf of Papagayo (Costa Rica, Eastern Tropical Pacific) for four months during the northern winter upwelling period (December 2013 to March 2014), and consecutively sampled after each month. Due to the upwelling environmental conditions within the Eastern Tropical Pacific, this region serves as a natural laboratory to study ecological processes such as bioerosion, which may reflect climate change scenarios. Time-series analyses showed a rapid settlement of bioeroders, particularly of lithophagine bivalves of the genus Lithophaga/Leiosolenus (Dillwyn, 1817), within the first two months of exposure. The observed enhanced calcium carbonate loss of coral substrate (>30%) may influence seawater carbon chemistry. This is evident by measurements of an elevated seawater pH (>8.2) and aragonite saturation state (Ωarag >3) at Matapalo Reef during the upwelling period, when compared to a previous upwelling event observed at a nearby site in distance to a coral reef (Marina Papagayo). Due to the resulting local carbonate buffer effect of the seawater, an influx of atmospheric CO2 into reef waters was observed. Substrates showed no secondary cements in thin-section analyses, despite constant seawater carbonate oversaturation (Ωarag >2.8) during the field experiment. Micro Computerized Tomography (μCT) scans and microcast-embeddings of the substrates revealed that the carbonate loss was primarily due to internal macrobioerosion and an increase in microbioerosion. This study emphasizes the interconnected effects of upwelling and carbonate bioerosion on the reef carbonate budget and the ecological turnovers of carbonate producers in tropical coral reefs under environmental change.