High‐resolution stable isotope analysis of coral skeletons is an established method to help reconstruct seawater growth temperatures for palaeoenvironmental reconstructions. Here we investigated the temperate, colonial, Mediterranean scleractinian coral Cladocora caespitosa. We first studied modern Adriatic corals from Mljet (Croatia) where growth temperatures were known. A clear sinusoidal cyclicity is present in the δ18O of the modern coral skeletons with average cycle minima ∼−3.3‰ and average maxima ∼−1.6‰. Cyclicity approximately matches the number of seasonal growth band pairs in each sample, implying a genetic link between δ18O cyclicity and factors that determine seasonal growth band development, here mainly water temperature. A derived and calibrated species‐specific δ18O–temperature relationship was then used to reconstruct growth temperatures from fossil C. caespitosa. This was applied to well‐preserved material collected from late Pleistocene deposits (MIS 1, 5 and 7) around the Gulf of Corinth, Greece. Clear seasonal δ18O signals are seen in all the fossil samples. MIS 5e was the warmest period studied with a lower than modern seasonal temperature range. The Early to mid‐Holocene probably experienced the lowest temperatures while conditions in MIS 7a/c were probably the wettest with most freshwater input into the Gulf.