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Reduced water quality, in particular increases in suspended sediments, has been linked to declines in fish abundance on coral reefs. Changes in gill structure induced by suspended sediments have been hypothesized to impair gill function and may provide a mechanistic basis for the observed declines; yet, evidence for this is lacking. We exposed juveniles of three reef fish species ( Amphiprion melanopus , Amphiprion percula and Acanthochromis polyacanthus ) to suspended sediments (0–180 mg l −1 ) for 7 days and examined changes in gill structure and metabolic performance (i.e. oxygen consumption). Exposure to suspended sediments led to shorter gill lamellae in A. melanopus and A. polyacanthus and reduced oxygen diffusion distances in all three species. While A. melanopus exhibited impaired oxygen uptake after suspended sediment exposure, i.e. decreased maximum and increased resting oxygen consumption rates resulting in decreased aerobic scope, the oxygen consumption rates of the other two species remained unaffected. These findings imply that species sensitive to changes in gill structure such as A. melanopus may decline in abundance as reefs become more turbid, whereas species that are able to maintain metabolic performance despite suspended sediment exposure, such as A. polyacanthus or A. percula , may be able to persist or gain a competitive advantage.