Bi-directional sex change has recently been reported in a range of reef fishes, including haremic species that were earlier thought to be protogynous (female to male). However, the occurrence of this phenomenon and the social conditions driving the reversion of males to females (reversed sex change) have been poorly documented under natural conditions. Reversed sex change is predicted to occur in low-density populations where facultative monogamy is common. However, few studies have evaluated this over a long period in such populations. We documented the occurrence of bi-directional sex change during a 3-yr demographic survey of a population characterised by small harem sizes in haremic hawkfish Cirrhitichthys falco. New males were derived following a change in sex of functional females (secondary males; n = 3) and juveniles always matured first as females (n = 3). Thus, C. falco exhibited a typical protogynous sexual pattern, consistent with a range of haremic fish species. We observed reversed sex change in two males. In both cases, all the females disappeared from their harems and the neighbouring males expanded their territories to encompass the territories of the sex changers. However, bachelor males did not always revert to females. A dominant male experienced bachelor status twice but regained mating opportunities following the immigration of a female into his territory or by taking a female from a neighbouring harem. Thus, we conclude that bachelor males use reversed sex change as a facultative tactic to regain reproductive status in a haremic mating system. In addition, we discuss the influence of harem size upon occurrence of reversed sex change.