Artificial light at night (ALAN) disrupts the physiology and behavior of coastal marine animals globally, but the cellular mechanisms underlying these effects remain unclear. We defined sleep in the damselfish Chromis viridis, tracked school dynamics within their coral habitats, and determined the acute and chronic effects of ALAN on behavioral interactions, sleep, and neuronal health under both controlled laboratory and natural reef conditions. We found that ALAN increased territorial occupancy, aggression, and nocturnal feeding while reducing sleep duration and consolidation. These sleep disruptions correlated with increased DNA damage in neurons of the dorsal pallium, a brain region involved in sleep-dependent brain functions. Our findings introduce a model that links ALAN-dependent alterations in sleep with neuronal insults in reef-dwelling tropical fish.