The Indo-Pacific damselfish Abudefduf vaigiensis (Quoy & Gaimard, 1825) was first observed in the Hawaiian Islands in the early 1990s and is now clearly established as a breeding population in the Islands. Sightings of fish with color patterns intermediate between those of A. vaigiensis and the very similar endemic Hawaiian sergeant, Abudefduf abdominalis (Quoy & Gaimard, 1825), suggest that hybridization of the two has occurred naturally. This study provides direct evidence of crossbreeding from observations and video footage of two separate spawnings in nearshore waters of O‘ahu and a third spawning in a public aquarium display tank. Reproductive behaviors were similar in intra- and interspecific spawning. However, one important difference was the absence of courtship by the male A. abdominalis toward the female A. vaigiensis in the inter-specific spawnings. Instead, the female A. vaigiensis initiated spawning and the male A. abdominalis remained to fertilize, guard, fan, and clean the hybrid clutch along with a previous clutch until the embryos hatched. Embryos collected from one hybrid clutch showed normal embryonic development and subsequently hatched to produce viable swimming larvae. These observations represent a rare example of interspecific spawning in the damselfish family (Pomacentridae) and an exceptional opportunity to study hybridization and introgression in a wild population of coral reef fishes.