We show how mate limitation appears to be critical in determining whether or not males exercise mate choice among available females. Thalassoma bifasciatum is a Caribbean reef fish with two distinct mating patterns: group-spawning and pair-spawning. In both mating systems, female fecundity is variable and size dependent, and female availability is high. However, sperm competition among group-spawning males apparently limits the number of effective matings in which a male may engage, whereas territorial pair-spawning males have little or no such limitation. Group-spawning males should be discriminating in their choice of mates and our data confirm this: there is strong evidence for assortative mating in group-spawns, with more large males joining in mating groups around large females. In contrast, pair-spawning males show no indication of mate preferences, and spawn with all females who arrive at their territories.