One of the key concerns in coral reef monitoring by remote sensing is to determine the effects of various optically-active constituents (i.e. suspended sediments, chlorophyll-a and yellow substances) present in the coastal waters to the observed reflectance produced by remote sensors. Quantification of these constituents is important since they serve as primary indicators of coral health and their probable waterborne environmental stressors. This paper describes the coupling of coral canopy bidirectional reflectance models previously developed by the authors with a two-flow radiative transfer solution specific to coastal waters to study the sensitivity of spectral reflectance of coral reef areas with combinations solid suspended matter and chlorophyll-a concentrations at various viewing and illumination conditions. Spectral field measurements including surface and subsurface reflectance profiles of coral-bottomed waters were obtained. Chlorophyll-a concentration and turbidity data were gathered from the field by deployment of field instruments. Results indicate comparable reflectance profiles produced by the computational model relative to field data, especially at shallower depths with weaker influence of chlorophyll-a concentration, more so at high concentration of suspended sediments. Inversion methods applied to coral reef reflectance modeling is likewise discussed, particularly its performance in the estimation of coral morphological parameters given variations in suspended sediment concentration and chlorophyll-a values.