Animal-derived nutrients play an important role in structuring nutrient regimes within and between ecosystems. When animals undergo repetitive, aggregating behavior through time, they can create nutrient hotspots where rates of biogeochemical activity are higher than those found in the surrounding environment. In turn, these hotspots can influence ecosystem processes and community structure. We examined the potential for reef fishes from the family Haemulidae (grunts) to create nutrient hotspots and the potential impact of these hotspots on reef communities. To do so, we tracked the schooling locations of diurnally migrating grunts, which shelter at reef sites during the day but forage off reef each night, and measured the impact of these fish schools on benthic communities. We found that grunt schools showed a high degree of site fidelity, repeatedly returning to the same coral heads. These aggregations created nutrient hotspots around coral heads where nitrogen and phosphorus delivery was roughly 10 and 7 times the respective rates of delivery to structurally similar sites that lacked schools of these fishes. In turn, grazing rates of herbivorous fishes at grunt-derived hotspots were approximately 3 times those of sites where grunts were rare. These differences in nutrient delivery and grazing led to distinct benthic communities with higher cover of crustose coralline algae and less total algal abundance at grunt aggregation sites. Importantly, coral growth was roughly 1.5 times greater at grunt hotspots, likely due to the important nutrient subsidy. Our results suggest that schooling reef fish and their nutrient subsidies play an important role in mediating community structure on coral reefs and that overfishing may have important negative consequences on ecosystem functions. As such, management strategies must consider mesopredatory fishes in addition to current protection often offered to herbivores and top-tier predators. Furthermore, our results suggest that restoration strategies may benefit from focusing on providing structure for aggregating fishes on reefs with low topographic complexity or focusing the restoration of nursery raised corals around existing nutrient hotspots.