Psychosocial stress due to dominance rank can have profound effects on physiology, behavior, and metabolism. Cortisol, a glucocorticoid that controls stress-induced responses in all vertebrates, may be an important mediator of changes in behavioral phenotype due to social structure or changes in status, such as dominance and/or subordinate rank. Bluebanded gobies, Lythrypnus dalli, are bidirectionally hermaphroditic fish, in which sex change occurs due to a change in social structure. In stable groups, L. dalli live in linear social dominance hierarchies, such that one male dominates over many females and defends a nesting territory. Upon male removal (MR), the most dominant female exhibits rapid increases in rates of aggressive and territorial behavior. This species is ideal for exploring the effect of social status and instability on cortisol levels due to the plasticity of life history transitions, such as sex change. Here, we compared systemic cortisol levels amongst the group hierarchy in stable groups, 30 min after MR, and 24 h after MR. Behavioral observations were taken in 10 min bins and used to determine the status of each fish in a group. There was no significant difference in water-borne cortisol levels in stable groups or after MR. These data indicate that systemic cortisol levels are not a good indicator of rapid changes in L. dalli following a disruption in social status. We anticipate to better understand the role of cortisol in stable groups and after MR as we study local mechanisms of cortisol signaling that are independent of systemic levels. Future studies will investigate more specific measures from the brain, such as cortisol, cortisol producing enzymes, or glucocorticoid receptor levels.