Sedimentological, paleontological, and geochemical data from core XK-1 in the Xisha Islands, South China Sea, allow a detailed documentation of the evolution of the reef-bank system from the early Pliocene to the late Pleistocene and of the aeolianite deposits from the late Pleistocene to the Holocene. A bank characterized by heterozoan carbonates occurred until 1.7 Ma. Between 1.7 and 0.2 Ma, the system turned into a reef dominated by photozoan carbonates. After 0.2 Ma, the aeolianite deposits, composed of heterozoan skeletal grains, occupied this area. A Pliocene to Pleistocene decrease in the abundance of planktonic foraminifera and some benthic foraminifer species generally associated with deep water settings indicates a long-term shallowing-upwards trend, resulting from the large-scale eustatic sea-level falls. Seven exposure horizons are recorded in core XK-1, due to high-frequency sea-level changes. The thickness of the reef body in the individual cycles increased after the Middle Pleistocene transition. This is interpreted as a consequence of the increase in duration of the short-term sea-level highstands. The formation of heterozoan aeolianite deposits after 0.2 Ma is probably caused by climate cooling, related with the intensification of East Asian winter monsoon. The rapid increase in coral abundance at similar to 1.7 Ma correlates well with a sharp decline in nutrient level, recorded by decreases in geo-chemical nutrient indexes values, declines in bryozoan and red algae (rhodolith) abundance, and decreases in the abundance of foraminifer species indicative of elevated nutrient-level. This correlation indicates that the carbonate factory turnovers were also affected by nutrient-level fluctuations, which could be linked to a paleoceanographic reorganization. These results demonstrate that together with sea-level fluctuations, also paleoceanographic changes had a significant effect on the Pliocene-Holocene tropical carbonate system.