Coral reef recovery from major disturbance is hypothesized to depend on the arrival of propagules from nearby undisturbed reefs. Therefore, reefs isolated by distance or current patterns are thought to be highly vulnerable to catastrophic disturbance. We found that on an isolated reef system in north Western Australia, coral cover increased from 9% to 44% within 12 years of a coral bleaching event, despite a 94% reduction in larval supply for 6 years after the bleaching. The initial increase in coral cover was the result of high rates of growth and survival of remnant colonies, followed by a rapid increase in juvenile recruitment as colonies matured. We show that isolated reefs can recover from major disturbance, and that the benefits of their isolation from chronic anthropogenic pressures can outweigh the costs of limited connectivity.