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Nearshore rocky reefs with scales of order 10–100 m are common along the world's coastline and often shape wave‐driven hydrodynamics and shoreline morphology in their lee. The interaction of waves with these reefs generally results in either two or four‐cell mean circulation systems (2CC and 4CC, respectively), with diverging flows behind the reefs and at the shoreline in the 2CC case and flows that diverge in the lee and converge at the shoreline in the 4CC case. By applying a phase‐resolving wave‐flow model to conduct a detailed analysis of mean momentum balances for waves interacting with nearshore reefs, we develop an understanding of the drivers of 2CC and 4CC flow dynamics and how they vary for different reef geometries and wave and water level conditions. The 2CC or 4CC patterns were primarily driven by alongshore pressure gradients toward the exposed (nonreef fronted) or reef‐fronted beach. These alongshore pressure gradients were dependent on the cross‐shore setup dynamics governed by the balance between pressure (i.e., related to the setup) and radiation stress gradients, and mean bottom stresses exerted on the water column. If shoreline wave setup in the lee of the reef was less than the exposed beach, a 4CC pattern developed with convergent flow at the shoreline in the lee of the reef; otherwise, a 2CC emerged with divergent flow at the shoreline. Across the parameter space investigated, reef roughness, distance to the shoreline, and beach slope were the three parameters most likely to change the flow patterns between 2CC and 4CC. Small‐scale nearshore rocky reefs are found worldwide along a variety of sandy and rocky coastlines. Wave breaking over small reefs drives mean alongshore circulation patterns in their lee that may cause shoreline accretion or erosion. In this study, we apply a wave‐flow model to investigate the physical drivers of the mean currents in the lee of small reefs. The alongshore circulation was primarily driven by the differences of the mean water levels between the lee and the adjacent nonreef fronted beaches. Mean water levels increased by wave breaking; however, the onshore‐directed mean flows over the reef created offshore‐directed bottom stresses that reduced the mean water levels in the reef lee. If the shoreline mean water levels in the lee were less than the adjacent beach, alongshore currents that converged from the adjacent beaches toward the reefs were developed. If the shoreline mean water levels in the lee of the reef exceeded the adjacent beach, alongshore currents that diverged from the reef toward the adjacent beach occurred. The improved understanding of the circulation drivers developed in this study enhances our ability to characterize and predict wave‐driven flows in small‐scale nearshore reef systems. Phase‐resolved model simulations were used to understand circulation patterns that occur in the lee of small‐scale reefsTwo‐cell and four‐cell circulation patterns were primarily driven by alongshore pressure gradients, which depend on the setup dynamicsA four‐cell pattern generally developed if the shoreline wave setup in the lee of the reef was less than the adjacent nonreef fronted beach Phase‐resolved model simulations were used to understand circulation patterns that occur in the lee of small‐scale reefs Two‐cell and four‐cell circulation patterns were primarily driven by alongshore pressure gradients, which depend on the setup dynamics A four‐cell pattern generally developed if the shoreline wave setup in the lee of the reef was less than the adjacent nonreef fronted beach