Temporal variation in seawater temperature plays a crucial role in coral reef ecology. Nanwan Bay, Southern Taiwan is home to well-developed coral reefs, which frequently experience cold-water intrusions caused by internal wave-induced upwelling, that manifest in distinct daily temperature minima. These temperature minima and their associated sources were studied by recording in situ bottom temperatures and sea levels observed at depths of 5 and 30 m from May 2007 to September 2008. These data were then compared to the East Asian Seas Nowcast/Forecast System, and it was found that daily temperature minima presented large variations with magnitudes of 2-3 °C over periods from days to months. It was further demonstrated that the cold-water intrusions may have originated from depths of ~100 m and were strongly affected by westward propagating mesoscale eddies from the Pacific basin. An impinging warm anticyclonic eddy in July 2007 may have combined with the El Niño, resulting in temperatures surpassing 29 °C and degree heating days >4.0 °C-days at both depths, which were coincidental with a mass coral bleaching event. This eddy's impact was additionally evident in high correlations between daily temperature minima and residual sea levels, suggesting that mesoscale eddies alter stratification, substantially influence temperature variation, and play important roles in understanding ecological processes on coral reefs.