The Caribbean reef shark occurs throughout the tropical western Atlantic Ocean, from North Carolina in the north to Brazil in the south, including Bermuda, the northern Gulf of Mexico, and the Caribbean Sea. However, it is extremely rare north of the Florida Keys. It prefers shallow waters on or around coral reefs, and is commonly found near the drop-offs at the reefs' outer edges. This shark is most common in water shallower than 30 m (98 ft), but has been known to dive to 378 m (1,240 ft).
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On the infrequent occasions when they swim in oceanic waters, grey reef sharks often associate with marine mammals or large pelagic fishes, such as sailfish (Istiophorus platypterus). There is an account of around 25 grey reef sharks following a large pod of bottlenose dolphins (Tursiops sp.), along with 25 silky sharks (C. falciformis) and a single silvertip shark. Rainbow runners (Elagatis bipinnulata) have been observed rubbing against grey reef sharks, using the sharks' rough skin to scrape off parasites.
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Grey reef sharks are often curious about divers when they first enter the water and may approach quite closely, though they lose interest on repeat dives. They can become dangerous in the presence of food, and tend to be more aggressive if encountered in open water rather than on the reef. There have been several known attacks on spearfishers, possibly by mistake, when the shark struck at the speared fish close to the diver. This species will also attack if pursued or cornered, and divers should immediately retreat (slowly and always facing the shark) if it begins to perform a threat display. Photographing the display should not be attempted, as the flash from a camera is known to have incited at least one attack. Although of modest size, they are capable of inflicting significant damage: during one study of the threat display, a grey reef shark attacked the researchers' submersible multiple times, leaving tooth marks in the plastic windows and biting off one of the propellers. The shark consistently launched its attacks from a distance of 6 m (20 ft), which it was able to cover in a third of a second. As of 2008, the International Shark Attack File listed seven unprovoked and six provoked attacks (none of them fatal) attributable to this species.
They are also found in mangrove areas, moving in and out with the tide and even in fresh water near the sea. They occur singly or in small groups. Adults often aggregate in reef channels at low tide. This is one of the three most common reef sharks in the Indo-Pacific, the two others are the grey reef shark, Carcharhinus amblyrhynchos and whitetip reef shark, Triaenodon obesus.
Grey reef sharks are prey for larger sharks, such as the silvertip shark. At Rangiroa Atoll in French Polynesia, great hammerheads (Sphyrna mokarran) feed opportunistically on grey reef sharks that are exhausted from pursuing mates. Known parasites of this species include the nematode Huffmanela lata and several copepod species that attach to the sharks' skin, and juvenile stages of the isopods Gnathia trimaculata and G. grandilaris that attach to the gill filaments and septa (the dividers between each gill).
Measuring up to 3 m (9.8 ft) long, the Caribbean reef shark is one of the largest apex predators in the reef ecosystem, feeding on a variety of fishes and cephalopods. They have been documented resting motionless on the sea bottom or inside caves, unusual behavior for an active-swimming shark. If threatened, it may perform a threat display in which it frequently changes direction and dips its pectoral fins. Like other requiem sharks, it is viviparous with females giving birth to 4–6 young every other year. Caribbean reef sharks are of some importance to fisheries as a source of meat, leather, liver oil, and fishmeal, but recently they have become more valuable as an ecotourist attraction. In the Bahamas and elsewhere, bait is used to attract them to groups of divers in controversial "shark feedings". This species is responsible for a small number of attacks on humans. The shark attacks usually happen in spring and summer.
There is a variety of biotic reef types, including oyster reefs and sponge reefs, but the most massive and widely distributed are tropical coral reefs. Although corals are major contributors to the framework and bulk material comprising a coral reef; the organisms most responsible for reef growth against the constant assault from ocean waves are calcareous algae, especially, although not entirely, coralline algae.