The vertical fluxes, vertical transformation forms and the controlling factors of rare earth elements in the coral reef ecosystem of Nansha Islands waters, South China Sea, were studied in 1993 to 1994 by using sediment trap and neutron active analysis. The main results were as follows: La has the highest vertical flux, accounting for 90% of the total flux of rare earth elements. The second is Nd or Ce. The vertical fluxes of rare earth elements are higher in Yongshu reef than in Zhubi reef. The transformations of light rare earth elements is easier than those of heavy rare earth elements. The main transformation forms of rare earth elements in Yongshu reef are carbonate, exchangeable-ion and Fe-Mn oxides,accounting for 73%, 11.3% and 10.3%, respectively. Organic matter+Sulfide and silicate amounted to 2.4% and 2. 37%, respectively. Carbonate and organic matter+sulfide are the main vertical removal forms of light rare earth elements. Fe-Mn oxides and silicate are the main vertical removal forms of heavy rare earth elements. Biogeochemical Process, distribution of biocoenose and geographic location of coral reef etc. are the main controlling factors of vertical transformation of rare earth elements in the coral reef ecosystem of Nansha Islands waters, South China Sea.