Owing to anthropogenic emissions, atmospheric concentrations of carbon dioxide could almost double between 2006 and 2100 according to business-as-usual carbon dioxide emission scenarios¹. Because the ocean absorbs carbon dioxide from the atmosphere^2, 3, 4, increasing atmospheric carbon dioxide concentrations will lead to increasing dissolved inorganic carbon and carbon dioxide in surface ocean waters, and hence acidification and lower carbonate saturation states^2, 5. As a consequence, it has been suggested that marine calcifying organisms, for example corals, coralline algae, molluscs and foraminifera, will have difficulties producing their skeletons and shells at current rates^6, 7, with potentially severe implications for marine ecosystems, including coral reefs^{6, 8, 9, 10, 11}. Here we report a seven-week experiment exploring the effects of ocean acidification on crustose coralline algae, a cosmopolitan group of calcifying algae that is ecologically important in most shallow-water habitats^12, 13, 14. Six outdoor mesocosms were continuously supplied with sea water from the adjacent reef and manipulated to simulate conditions of either ambient or elevated seawater carbon dioxide concentrations. The recruitment rate and growth of crustose coralline algae were severely inhibited in the elevated carbon dioxide mesocosms. Our findings suggest that ocean acidification due to human activities could cause significant change to benthic community structure in shallow-warm-water carbonate ecosystems.