Sweetlips make grunting sounds with their pharyngeal teeth, which are then amplified by their gas bladder. Adult sweetlips live in shoals around coral reefs. The juveniles however are relatively solitary, staying close to lagoons and coastal ponds. Yellow-banded sweetlips are primarily nocturnal.
During the day, they hide in groups under rocky overhangs or large fragments of coral. At night, they venture out of their lair looking for burrowing invertebrates that they catch by sifting through large mouthfuls of sand. Around the islands of Palau, yellow-banded sweetlips come together to mate during the new moon.