Artificial light at night (ALAN) has become a primary environmental concern and has been shown to affect various organisms and physiological processes. Sleep is a vital evolutionarily conserved metabolic state crucial for animals’ cognitive performance. Recently, sleep has been recognized as essential for the nuclear maintenance and repair of DNA damage accumulated in neurons. Sleep is strongly regulated by light entrainment and the circadian clock, but little is known about the effect of light pollution on sleep in marine animals. Here, we studied the effect of ALAN on nocturnal behavior and brain DNA damage in a reef fish, the blue-green chromis damselfish (Chromis viridis). This diurnal species of damselfish is highly abundant in the Red Sea and throughout the Indo-Pacific region, inhabiting colonies of branching corals. Using infrared cameras and machine-learning based video-tracking, we characterized the nocturnal activity of fish schools within their coral host. We show that the fish remain mostly immobile at night, maintaining conserved territories inside the coral. However, ALAN notably increased their nocturnal activity, spatial use, and social interactions at night. Furthermore, we quantified neuronal double-strand-breaks (DSBs) during the day, night, and under ALAN using confocal imaging of the DSBs signaling protein γH2AX. We found that neuronal DSBs accumulated during the day are resolved at night in a sleep-related brain region. However, the fish kept the daily levels of DNA damage under a light-polluted night. These findings raise ecological concerns regarding the impact of light pollution on sleep and neuronal health in reef-inhabiting fish.