Social groups are often structured by dominance hierarchies in which subordinates consistently defer to dominants. High-ranking individuals benefit by gaining inequitable access to resources, and often achieve higher reproductive success; but may also suffer costs associated with maintaining dominance. We used a large-scale field study to investigate the benefits and costs of dominance in the angelfish Centropyge bicolor, a sequential hermaphrodite. Each haremic group contains a single linear body size-based hierarchy with the male being most dominant, followed by several females in descending size order. Compared to their subordinate females, dominant males clearly benefited from disproportionately high spawning frequencies, but bore costs in lower foraging rates and greater aggressive defence of their large territories. Within the female hierarchy, more dominant individuals benefited from higher spawning frequencies and larger home ranges, but displayed neither higher foraging rates nor spawn order priority. However, dominance in females was also linked to aggressiveness, particularly towards immediate subordinates, suggesting that females were using energetically costly aggression to maintain their high rank. We further showed by experimentally removing dominant females that the linear hierarchy was also a social queue, with subordinates growing to inherit higher rank with its attendant benefits and costs when dominants disappeared. We suggest that in C. bicolor, the primary benefit of high rank is increased reproductive success in terms of current spawning frequency and the prospect of inheriting the male position in the near future, which may be traded off against the cost of aggressively defending rank and territory.