Labile maturation and sex determination should be advantageous where the probability of finding a mating partner is unpredictable. Here we tested the hypothesis that the presence of a potential mating partner induces maturation and sex determination in a coral-dwelling fish, Gobiodon erythrospilus. In natural populations at Lizard Island (Great Barrier Reef), single individuals were less likely to be mature than paired individuals and they matured at a larger size, indicating plasticity in the timing of maturation. By manipulating group structure we demonstrated that both the timing of maturation and the sex of maturing individuals are socially controlled. Single juveniles did not mature, but maturation was rapidly induced by the presence of an adult partner. In addition, sex determination was found to be labile, with juveniles maturing into the opposite sex of the partner encountered. To our knowledge, this is the first experimental demonstration of social induction of maturation in conjunction with labile sex determination at maturation in vertebrates. This flexibility enables individuals to maximize their reproductive success in an environment where the timing of mate acquisition and the sex of their future partner are unpredictable.