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Environmental fluctuations are becoming increasingly volatile in many ecosystems, highlighting the need to better understand how stochastic and deterministic processes shape patterns of commonness and rarity, particularly in high-diversity systems like coral reefs. Here, we analyze reef fish time-series across the Great Barrier Reef to show that approximately 75% of the variance in relative species abundance is attributable to deterministic, intrinsic species differences. Nevertheless, the relative importance of stochastic factors is markedly higher on reefs that have experienced stronger coral cover volatility. By contrast, α-diversity and species composition are independent of coral cover volatility but depend on environmental gradients. Our findings imply that increased environmental volatility on coral reefs erodes assemblage’s niche structure, an erosion that is not detectable from static measures of biodiversity.One-Sentence SummaryCoral cover volatility modulates how stochastic and deterministic processes shape commonness and rarity in coral reef fishes.