Jewel damselfish, Plectroglyphidodon lacrymatus, aggressively defend small territories on coral reefs in which they cultivate lawns of edible macroalgae. Pairwise frequency counts showed that juvenile coral density was lower inside damselfish territories than that in adjacent non-defended areas on lagoon patch reefs in Kenya. These differences in coral density decreased as coral size increased. Direct farming effects of the damselfish and indirect inhibitory effects from higher algal densities inside territories are both thought to be potentially responsible for the results attained herein. Damselfish territories can occupy a large proportion of a coral reef; territorial behaviour in fish may have greater impacts on reef structure, in particular the resilience and growth rate of juvenile corals, than previously appreciated.