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Nitrous oxide (N2O) is an ozone-depleting greenhouse gas that has 300 times higher global warming potential than carbon dioxide. Although the oceans contribute about 21% of atmospheric global N2O emissions, we know little about N2O dynamics in nearshore systems. Here, we document the four-fold increase in the abundance of a large N2O-producing invertebrate (Herdmania grandis) over two decades in warming reefs that were previously dominated by carbon-capturing kelp but have since become tropicalised. Temperature manipulation experiments revealed that N2O production by Herdmania also increased significantly with temperature. By upscaling our results to a coastal region of Australia impacted by warming, we estimate that under future warming scenarios, subtropical reefs will produce more N2O than adjacent estuaries. Our findings suggest that we are severely underestimating N2O production from coastal systems, and further tropicalisation of subtropical and temperate reefs in the future may increase greenhouse gas emissions on a global scale.