BACKGROUND: Scleractinian corals are the foundation of reef ecosystems in tropical marine environments. Their great success is due to interactions with endosymbiotic dinoflagellates (Symbiodinium spp.), with which they are obligately symbiotic. To develop a foundation for studying coral biology and coral symbiosis, we have constructed a set of cDNA libraries and generated and annotated ESTs from two species of corals, Acropora palmata and Montastraea faveolata. RESULTS: We generated 14,588 (Ap) and 3,854 (Mf) high quality ESTs from five life history/symbiosis stages (spawned eggs, early-stage planula larvae, late-stage planula larvae either infected with symbionts or uninfected, and adult coral). The ESTs assembled into a set of primarily stage-specific clusters, producing 4,980 (Ap), and 1,732 (Mf) unigenes. The egg stage library, relative to the other developmental stages, was enriched in genes functioning in cell division and proliferation, transcription, signal transduction, and regulation of protein function. Fifteen unigenes were identified as candidate symbiosis-related genes as they were expressed in all libraries constructed from the symbiotic stages and were absent from all of the non symbiotic stages. These include several DNA interacting proteins, and one highly expressed unigene (containing 17 cDNAs) with no significant protein-coding region. A significant number of unigenes (25) encode potential pattern recognition receptors (lectins, scavenger receptors, and others), as well as genes that may function in signaling pathways involved in innate immune responses (toll-like signaling, NFkB p105, and MAP kinases). Comparison between the A. palmata and an A. millepora EST dataset identified ferritin as a highly expressed gene in both datasets that appears to be undergoing adaptive evolution. Five unigenes appear to be restricted to the Scleractinia, as they had no homology to any sequences in the nr databases nor to the non-scleractinian cnidarians Nematostella vectensis and Hydra magnipapillata. CONCLUSION: Partial sequencing of 5 cDNA libraries each for A. palmata and M. faveolata has produced a rich set of candidate genes (4,980 genes from A. palmata, and 1,732 genes from M. faveolata) that we can use as a starting point for examining the life history and symbiosis of these two species, as well as to further expand the dataset of cnidarian genes for comparative genomics and evolutionary studies.