One of the more peaceful damselfishes, the yellowtail damsel is an excellent fish for beginning hobbyists. It can be kept in small groups if the tank is large enough and there are sufficient hiding places and bolt-holes for it in the rockwork. Unlike other fishes of its family, the yellowtail damsel does not become overly aggressive or territorial.

This fish is produced commercially, and an aquacultured fish adapts to aquariums easily. Because of its hardiness, it is often used to start the nitrogen cycle in a new aquarium. Unlike some other damsels used for this purpose, there is usually not a problem leaving it in the tank and adding other fish. The yellowtail damsel is also excellent in a reef aquarium and will not bother any types of invertebrates.

Feeding a yellowtail damsel is not a problem because it will readily accept most standard aquarium fare. In addition, it continually grazes on algae growing in the tank. It will often pair up in an aquarium and spawn, although it is difficult if not impossible to raise the babies in a tank with other fish.