Here we describe a shallow-water karst ecosystem observed along the coast of Taiwan’s Orchid Island, consisting of extensive networks of caves, canyons, and pools. Measurements at various locations in two pools revealed marked gradients in nutrients, temperature, and salinity, indicative of submarine, relatively nutrient-rich, and terrestrially-derived groundwater discharge into the coastal marine environment. Within these pools, dead coral formations dominated at land-adjacent locations, whereas mid- and sea-adjacent locations housed assemblages of corals, algae, and sponges. Several caves were found to house a rich variety of sponges, including 17 species that are potentially new to science. The sponge fauna included sclerosponges, which are hard, coral-like, atypical sponges that combine calcareous and siliceous skeletal parts. Other notable species included the recently described Vetulina incrustans and potentially new species belonging to the lithistid family, Theonellidae. Additionally, the caves housed red macroalgae and ahermatypic corals. The singular ecosystem currently receives no formal protection, and parts of it are adjacent to a nuclear storage waste facility. Overall, our study revealed that the cave and pool system houses a complex and diverse marine community of uncommon organisms, including a large number of potentially new species, highlighting its ecological significance.