Coral proxy records of sea surface temperature (SST) and hydrological balance have become important tools in the field of tropical paleoclimatology. However, coral aragonite is subject to post-depositional diagenetic alteration in both the marine and vadose environments. To understand the impact of diagenesis on coral climate proxies, two mid-Holocene Porites corals from raised reefs on Muschu Island, Papua New Guinea, were analysed for Sr/Ca, δ18O, and δ13C along transects from 100% aragonite to 100% calcite. Thin-section analysis showed a characteristic vadose zone diagenetic sequence, beginning with leaching of primary aragonite and fine calcite overgrowths, transitional to calcite void filling and neomorphic, fabric selective replacement of the coral skeleton. Average calcite Sr/Ca and δ18O values were lower than those for coral aragonite, decreasing from 0.0088 to 0.0021 and −5.2 to −8.1‰, respectively. The relatively low Sr/Ca of the secondary calcite reflects the Sr/Ca of dissolving phases and the large difference between aragonite and calcite Sr/Ca partition coefficients. The decrease in δ18O of calcite relative to coral aragonite is a function of the δ18O of precipitation. Carbon-isotope ratios in secondary calcite are variable, though generally lower relative to aragonite, ranging from −2.5 to −10.4%. The variability of δ13C in secondary calcite reflects the amount of soil CO2 contributing 13C-depleted carbon to the precipitating fluids. Diagenesis has a greater impact on Sr/Ca than on δ18O; the calcite compositions reported here convert to SST anomalies of 115°C and 14°C, respectively. Based on calcite Sr/Ca compositions in this study and in the literature, the sensitivity of coral Sr/Ca-SST to vadose-zone calcite diagenesis is 1.1 to 1.5°C per percent calcite. In contrast, the rate of change in coral δ18O-SST is relatively small (−0.2 to 0.2°C per percent calcite). We show that large shifts in δ18O, reported for mid-Holocene and Last Interglacial corals with warmer than present Sr/Ca-SSTs, cannot be caused by calcite diagenesis. Low-level calcite diagenesis can be detected through X-ray diffraction techniques, thin section analysis, and high spatial resolution sampling of the coral skeleton and thus should not impede the production of accurate coral paleoclimate reconstructions.