This paper assesses the reliability with which fossil reefs record the diversity and community structure of adjacent Recent reefs. The diversity and taxonomic composition of Holocene raised fossil reefs was compared with those of modern reef coral life and death assemblages in adjacent moderate and low-energy shallow reef habitats of Madang Lagoon, Papua New Guinea. Species richness per sample area and Shannon-Wiener diversity (H′) were highest in the fossil reefs, intermediate in the life assemblages, and lowest in the death assemblages. The taxonomic composition of the fossil reefs was most similar to the combination of the life and death assemblages from the modern reefs adjacent to the two fossil reefs. Depth zonation was recorded accurately in the fossil reefs. The Madang fossil reefs represent time-averaged composites of the combined life and death assemblages as they existed at the time the reef was uplifted.

Because fossil reefs include overlapping cohorts from the life and death assemblages, lagoonal facies of fossil reefs are dominated by the dominant sediment-producing taxa, which are not necessarily the most abundant in the life assemblage. Rare or slow-growing taxa accumulate more slowly than the encasing sediments and are underrepresented in fossil reef lagoons. Time-averaging dilutes the contribution of rare taxa, rather than concentrating their contribution. Consequently, fidelity indices developed for mollusks in sediments yield low values in coral reef death and fossil assemblages. Branching corals dominate lagoonal facies of fossil reefs because they are abundant, they grow and produce sediment rapidly, and most of the sediment they produce is not exported.

Fossil reefs distinguished kilometer-scale variations in community structure more clearly than did the modern life assemblages. This difference implies that fossil reefs may provide a better long-term record of community structure than modern reefs. This difference also suggests that modern kilometer-scale variation in coral reef community structure may have been reduced by anthropogenic degradation, even in the relatively unimpacted reefs of Madang Lagoon. Holocene and Pleistocene fossil reefs provide a time-integrated historical record of community composition and may be used as long-term benchmarks for comparison with modern, degraded, nearshore reefs. Comparisons between fossil reefs and degraded modern reefs display gross changes in community structure more effectively than they demonstrate local extinction of rare taxa.