In systems where territory quality varies, animals are expected to exhibit plasticity in behaviour in order to maximize fitness relative to their present territory quality. This requires assessment of territory quality followed by decision-making in relation to the priority of activities necessary for survival and reproduction. We examined how differences in territory quality of beaugregory damselfish (Stegastes leucostictus) influence the prioritization of courtship and egg defence by comparing behavioural responses of males defending artificial sites (high quality) with males defending natural sites (low quality) when presented with an egg predator, a conspecific female, and a simultaneous choice between both. A significant three-way interaction of territory quality, presentation type and stimulus was observed for time near stimuli. In paired presentations, males defending low-quality territories spent more time near a female and less near an egg predator; while males on high-quality territories spent more time near a predator than a female. Additionally, comparing single and paired presentations reveals that behaviours towards egg predators remain constant while behaviours towards females decrease with paired stimuli. These data suggest that territory quality and ecological context impact decision-making and the relative values of potential reproduction and/or past reproductive effort.