Microbial community structure on coral reefs is strongly influenced by coral–algae interactions; however, the extent to which this influence is mediated by fishes is unknown. By excluding fleshy macroalgae, cultivating palatable filamentous algae and engaging in frequent aggression to protect resources, territorial damselfish (f. Pomacentridae), such as Stegastes , mediate macro-benthic dynamics on coral reefs and may significantly influence microbial communities. To elucidate how Stegastes apicalis and Stegastes nigricans may alter benthic microbial assemblages and coral health, we determined the benthic community composition (epilithic algal matrix and prokaryotes) and coral disease prevalence inside and outside of damselfish territories in the Great Barrier Reef, Australia. 16S rDNA sequencing revealed distinct bacterial communities associated with turf algae and a two to three times greater relative abundance of phylotypes with high sequence similarity to potential coral pathogens inside Stegastes 's territories. These potentially pathogenic phylotypes (totalling 30.04% of the community) were found to have high sequence similarity to those amplified from black band disease (BBD) and disease affected corals worldwide. Disease surveys further revealed a significantly higher occurrence of BBD inside S. nigricans 's territories. These findings demonstrate the first link between fish behaviour, reservoirs of potential coral disease pathogens and the prevalence of coral disease.