The presence of large bottom roughness, such as that formed by benthic organisms on coral reef flats, has important implications for the size, concentration, and transport of suspended sediment in coastal environments. A 3 week field study was conducted in approximately 1.5 m water depth on the reef flat at Ningaloo Reef, Western Australia, to quantify the cross-reef hydrodynamics and suspended sediment dynamics over the large bottom roughness (∼20–40 cm) at the site. A logarithmic mean current profile consistently developed above the height of the roughness; however, the flow was substantially reduced below the height of the roughness (canopy region). Shear velocities inferred from the logarithmic profile and Reynolds stresses measured at the top of the roughness, which are traditionally used in predictive sediment transport formulations, were similar but much larger than that required to suspend the relatively coarse sediment present at the bed. Importantly, these stresses did not represent the stresses imparted on the sediment measured in suspension and are therefore not relevant to the description of suspended sediment transport in systems with large bottom roughness. Estimates of the bed shear stresses that accounted for the reduced near-bed flow in the presence of large roughness vastly improved the relationship between the predicted and observed grain sizes that were in suspension. Thus, the impact of roughness, not only on the overlying flow but also on bed stresses, must be accounted for to accurately estimate suspended sediment transport in regions with large bottom roughness, a common feature of many shallow coastal ecosystems.