Many pomacentrid fishes spawn demersally, often onto nest sites of filamentous algae. The temperate Western Australian pomacentrid P. mccullochi spawns onto such nest sites. During preliminary observations nest sites with visibly different algal structures were observed, with the filamentous algal cover of some nests being greatly reduced compared to others. These observations led us to hypothesise that algal management by this species would lead to a large change in the algal structure of nest sites, through more intense disturbance processes than have been described in tropical herbivorous pomacentrids when maintaining their algal feeding areas. Behavioural observations and collection of algae from nest sites revealed that in late spring and summer P. mccullochi maintained and defended a nesting site that was populated by filamentous algae. Fish with nests defended the territory more intensively than fish without nests, at a cost of reduced feeding rates. The algae within the nest sites progressed through a series of three stages: prepared nests without eggs, nests with eggs and cropped nests. These three stages were characterised by variation in the biomass of red filamentous algae, which was highest on nests with eggs. The nest algae were severely cropped back after hatching and most of the biomass of red filamentous algae was removed. On this small spatial scale during late spring and summer, the effect of algal manipulation by this temperate pomacentrid in an algal canopy dominated reef system, is comparable to the strongest effects of the tropical pomacentrids that maintain species poor, high biomass feeding areas in coral reef systems. © 2013 Copyright Taylor and Francis Group, LLC.