The social organization of two comparable colonies of bicolor damselfish, Eupomacentrus partius (Poey), is described at various times of the year. A small laboratory colony (8 adults) was observed during two different social phases. The first included the initial establishment of dominant-subordinate relationships among its members, as well as the establishment of the general spatial distribution of fish within the aquarium. The second phase was characterized hy a high level of territoriality and reproductive activity. A field colony of similar size (9 adults, 4 juveniles) was observed by SCUBA and underwater television also during the reproductive phase. This colony was located 1.5 km off the west coast of North Bimini, Bahamas and at a depth of 20 m. The social structure of both colonies was characterized by a straight-line, nip-dominant hierarchy which was stable and largely size-dependent. Aggressiveness and maleness also appeared to play important roles in the dominance relationships. Differences in the distribution of chases and challenges recorded from the laboratory colony during the two differing social phases indicated that dynamic processes were underlying the basic social structure of both colonies. Little or no diurnal fluctuation in aggressiveness was apparent during the two phases studied in the laboratory. The level of chasing activity throughout the day, however, was well correlated with hierarchical rank during the initial phase of observations, but such was not the case during the later phase. The initial phase was also characterized by closely ranked individuals directing most "attention" at one another, while during the later reproductive phase, much of this "attention" was directed at the Omega fish. It appeared as if the Omega was playing the role of a "scapegoat" for the directed aggression of higher ranking members and thereby relieving aggressive tension among those members of the colony. A similar phenomenon, operating in the field colony, was also indicated by limited data. The important role of prior residence within a colony and within a specific area is illustrated by examples from the field. Finally, evidence is brought forth to suggest that interspecific aggression. although seldom studied, is a most important factor in the lives and habits of animals living within the reef community.