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A coupled wave‐circulation numerical model was used to simulate the distribution of wave energy, as well as the circulation induced by wave breaking, wind, and tidal forcing, within a coral reef system in Kaneohe Bay, Oahu, Hawaii. Modeled wave, current, and wave setup fields were compared with field measurements collected on the forereef, reef flat, and reef channels and in the lagoon over a 4‐week period. The predicted wave height transformation across the reef‐lagoon system was in good agreement with field observations, using single‐parameter (spatially uniform) values to describe both wave‐breaking and frictional dissipation. The spatial distribution of the resulting wave setup field drove a persistent wave‐driven flow across the reef flat that returned to the ocean through two deeper channels in the reef. Both the magnitude and direction of these currents were well described using a spatially uniform …