Since the discovery of Chromera velia as a novel coral-associated microalga, this organism has attracted interest because of its unique evolutionary position between the photosynthetic dinoflagellates and the parasitic apicomplexans. The nature of the relationship between Chromera and its coral host is controversial. Is it a mutualism, from which both participants benefit, a parasitic relationship, or a chance association? To better understand the interaction, larvae of the common Indo-Pacific reef-building coral Acropora digitifera were experimentally infected with Chromera and the impact on the host transcriptome assessed at 4, 12, and 48 h post-infection using Illumina RNA-Seq technology. The transcriptomic response of the coral to Chromera was complex and implies that host immunity is strongly suppressed, and both phagosome maturation and the apoptotic machinery modified. These responses differ markedly from those described for infection with a competent strain of the coral mutualist Symbiodinium, instead resembling those of vertebrate hosts to parasites and/or pathogens such as Mycobacterium tuberculosis. Consistent with ecological studies suggesting that the association may be accidental, the transcriptional response of A. digitifera larvae leads us to conclude that Chromera could be a coral parasite, commensal, or accidental bystander, but certainly not a beneficial mutualist.