Water quality and circulation in Florida Bay (a shallow, subtropical estuary in south Florida) are highly dependent upon the development and evolution of carbonate mud banks distributed throughout the Bay. Predicting the effect of natural and anthropogenic perturbations on carbonate sedimentation requires an understanding of annual, seasonal, and daily variations in the biogenic and inorganic processes affecting carbonate sediment precipitation and dissolution. In this study, net calcification rates were measured over diurnal cycles on 27 d during summer and winter from 1999 to 2003 on mud banks and four representative substrate types located within basins between mud banks. Substrate types that were measured in basins include seagrass beds of sparse and intermediate density Thalassia sp., mud bottom, and hard bottom communities. Changes in total alkalinity were used as a proxy for calcification and dissolution. On 22 d (81%), diurnal variation in rates of net calcification was observed. The highest rates of net carbonate sediment production (or lowest rates of net dissolution) generally occurred during daylight hours and ranged from 2.900 to -0.410 g CaCO3 m-2 d-1. The lowest rates of carbonate sediment production (or net sediment dissolution) occurred at night and ranged from 0.210 to -1.900 g CaCO3 m -2 night-1. During typical diurnal cycles, dissolution during the night consumed an average of 29% of sediment produced during the day on banks and 68% of sediment produced during the day in basins. Net sediment dissolution also occurred during daylight, but only when there was total cloud cover, high turbidity, or hypersalinity. Diurnal variation in calcification and dissolution in surface waters and surface sediments of Florida Bay is linked to cycling of carbon dioxide through photosynthesis and respiration. Estimation of long-term sediment accumulation rates from diurnal rates of carbonate sediment production measured in this study indicates an overall average accumulation rate for Florida Bay of 8.7 cm 1000 yr-1 and suggests that sediment dissolution plays a more important role than sediment transport in loss of sediment from Florida Bay. ?? 2006 Estuarine Research Federation.