Dinoflagellate–cnidarian associations form both the trophic and structural foundation of coral-reef ecosystems. Previous studies have highlighted the role of host innate immunity in regulation of these partnerships. This study reveals the presence of a transforming growth factor beta (TGFβ) in the coral Fungia scutaria that clusters with TGFβ sensu stricto (ss) from other animals. In functional studies of F. scutaria larvae, we show that (1) TGFβ ss mRNA is expressed during early stages of development prior to the onset of symbiosis; (2) apparent interference of the TGFβ pathway impairs the onset of symbiosis; and (3) this effect is associated with an increase of cytotoxic nitric oxide secretion, an immune response. This work highlights the importance of the TGFβ pathway in early life-history stages of corals by suggesting that its inhibition impacts the onset of symbiosis.