Field data were collected on Fatato Island, Funafuti Atoll, Tuvalu, to understand contemporary wave transformation processes on a previously unstudied atoll. Subsequently, a fully nonlinear Boussinesq model was used to simulate wave processes on Fatato and other reefs with variable morphology to evaluate the impact of sea level rise (SLR) on shoreline wave energy, runup and inundation within atoll environments. Field data from Fatato Island indicate clear tidal controls on sea swell (SS) waves and setup at the reef flat and shoreline, but identify no tidal influence on infragravity (IG) waves that were consistently amplified towards the shoreline. The open source model Basilisk GN was capable of replicating two months of field data, achieving model skill > 0.96 for SS, IG and setup processes at the outer reef flat and shoreline. Numerical outputs were used to analyse runup elevation at the shoreline and highlighted the importance of setup at low tide, SS waves at high tide, and IG waves at all tidal stages. Simulations of wave transformation on Fatato indicate that 0.3 m of SLR will cause inundation at spring high tide under annual maximum swell and storm wave conditions. Additional simulations show that vertical reef growth with SLR can mitigate the associated increase in shoreline energy but also demonstrate that reef growth has limited potential to protect islands from inundation. Results from Fatato were extended by simulating wave transformation and inundation on 768 idealised reefs with variable morphology under mean, swell and storm conditions. Model outputs were used to develop the island inundation index, using reef width, reef depth and berm height to classify levels of vulnerability to inundation under moderate wave conditions. The index is a simple tool for assessing island vulnerability and was applied to track the trajectory of vulnerability to inundation on a range of studied reef islands in the Pacific Ocean, with SLR up to 1 m. Results from this thesis can be used to assist coastal management on atoll islands facing SLR.