Abstract. The rugged submarine topography of the Azores supports a diverse heterozoan association resulting in intense biotically-controlled carbonate-production and accumulation. In order to characterise this cold-water (C) factory a 2-year experiment was carried out in the southern Faial Channel to study the biodiversity of hardground communities and for budgeting carbonate production and degradation along a bathymetrical transect from the intertidal to bathyal 500 m depth.Seasonal temperatures peak in September (above a thermocline) and bottom in March (stratification diminishes) with a decrease in amplitude and absolute values with depth, and tidal-driven short-term fluctuations. Measured seawater stable isotope ratios and levels of dissolved nutrients decrease with depth, as do the calcium carbonate saturation states. The photosynthetic active radiation shows a base of the euphotic zone in ∼70 m and a dysphotic limit in ∼150 m depth.Bioerosion, being primarily a function of light availability for phototrophic endoliths and grazers feeding upon them, is ∼10 times stronger on the illuminated upside versus the shaded underside of substrates in the photic zone, with maximum rates in the intertidal (−631 g/m 2 /yr). Rates rapidly decline towards deeper waters where bioerosion and carbonate accretion are slow and epibenthic/endolithic communities take years to mature. Accretion rates are highest in the lower euphotic zone (955 g/m 2 /yr), where the substrate is less prone to hydrodynamic force. Highest rates are found -inversely to bioerosion -on down-facing substrates, suggesting that bioerosion may be a key factor governing the preferCorrespondence to: M. Wisshak (max.wisshak@gzn.uni-erlangen.de) ential settlement and growth of calcareous epilithobionts on down-facing substrates.In context of a latitudinal gradient, the Azores carbonate cycling rates plot between known values from the coldtemperate Swedish Kosterfjord and the tropical Bahamas, with a total range of two orders in magnitude. Carbonate budget calculations for the bathymetrical transect yield a mean 266.9 kg of epilithic carbonate production, −54.6 kg of bioerosion, and 212.3 kg of annual net carbonate production per metre of coastline in the Azores C factory.