Increasing numbers and speeds of vessels in areas with populations of cetaceans may have the cumulative effect of reducing habitat quality by increasing the underwater noise level. Here, we first use digital acoustic tags to demonstrate that free-ranging delphinids in a coastal deepwater habitat are subjected to varying and occasionally intense levels of vessel noise. Vessel noise and sound propagation measurements from a shallow-water habitat are then used to model the potential impact of high sound levels from small vessels on delphinid communication in both shallow and deep habitats, with bottlenose dolphins Tursiops sp. and short-finned pilot whales Globicephala macrorhynchus as model organisms. We find that small vessels travelling at 5 knots in shallow water can reduce the communication range of bottlenose dolphins within 50 m by 26%. Pilot whales in a quieter deep-water habitat could suffer a reduction in their communication range of 58% caused by a vessel at similar range and speed. Increased cavitation noise at higher speeds drastically increases the impact on the communication range. Gear shifts generate high-level transient sounds (peak– peak source levels of up to 200 dB re 1 μPa) that may be audible over many kilometres and may disturb close-range animals. We conclude that noise from small vessels can significantly mask acoustically mediated communication in delphinids and contribute to the documented negative impacts on animal fitness.