A coupled wave-circulation numerical model of Hanalei Bay, Hawaii, was constructed to investigate controls on nearshore hydrodynamics and overall circulation of a bathymetrically-complex coral reef embayment that is exposed to large waves and river floods several times per annum. The model was calibrated using in situ data representative of the two conditions that dominate the region's wave climate: one associated with local trade winds and associated trade-wind waves, and the other with distant-source episodic large swells. The model results were improved by including spatially-varying hydrodynamic bed roughness and making the semi-empirical wave-breaking parameter dependent on incident wave steepness and reef slope. During trade-wind conditions, circulation was primarily wind-driven and volume flux-based flushing times of the bay were on the order of 35 h. Under the episodic swell conditions, circulation were dominated by wave-driven flows and flushing times decreased to as little as 2 h. The vigorous hydrodynamics that occur during the upper 10% most energetic swell conditions indicate that only a few (0–10) events each year are likely capable of exporting significant volumes of sediment from the bay. Like many fringing reef areas backed by steep-sided watersheds on tropical and sub-tropical high islands worldwide, Hanalei Bay receives high episodic fluvial sediment load during a similarly low number of flood events. These similarly episodic but decoupled processes of sediment delivery and removal identified here suggest that the water quality and sedimentary environment of Hanalei Bay and similar linked watershed-reef systems are sensitive to changes in annual storm frequency and intensity.