Predation and competition are critical processes influencing the ecology of organisms, and can play an integral role in shaping coral reef fish communities. This study compared the relative and interacting effects of competition and predation on two competing species of coral reef fish, Pomacentrus amboinensis and P. moluccensis (Pomacentridae), using a multifactorial experiment. Fish were subjected to the sight and smell of a known predator (Pseudochromis fuscus), the presence of the heterospecific competitor (i.e., P. amboinensis vs. P. moluccensis), or a combination of the two for a period of 19 days. The sub-lethal effects of predator/competitor treatments were compared with controls; a combination of otolith microstructure analysis and observations were used to determine otolith growth patterns and behaviour. We predicted that the stress of competition and/or predation would result in strong sub-lethal impacts, and act synergistically on growth and behavioural patterns. We found strong evidence to support this prediction, but only for P. amboinensis, which suffered reductions in growth in both predator and competitor treatments, with the largest reductions occurring when subjected to both predation and competition concurrently. There was strong evidence of asymmetrical competition between the two damselfish species, with P. moluccensis as the dominant competitor, displaying strong aggressive behaviour towards P. amboinensis. Growth reductions for P. amboinensis in predator/competitor treatments appeared to come about primarily due to increases in shelter seeking behaviour, which significantly reduced the foraging rates of individuals compared with controls. These data highlight the importance of predator/competitor synergisms in influencing key behaviours and demographic parameters for juvenile coral reef fishes.