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Sea surface temperatures are rising at unprecedented rates, leading to a progressive degradation of complex habitats formed by coral reefs. In parallel, acute thermal stress can lead to physiological challenges for ectotherms that inhabit coral reefs, including fishes. Warming and habitat simplification could push marine fishes beyond their physiological limits in the near future. Specifically, questions remain on how warming and habitat structure influence the brains of marine fishes. Here we evaluated how thermal stress and habitat loss are acting independently and synergistically as stressors in a damselfish of the Western Atlantic, Abudefduf saxatilis. For this experiment, 40 individuals were exposed to different combinations of temperature (27 °C or 31 °C) and habitat complexity (complex vs. simple) for 10 days, and changes in brain gene expression and oxidative stress of liver and muscle were evaluated. The results indicate that warming resulted in increased oxidative damage in the liver (P = 0.007) and changes in gene expression of the brain including genes associated with neurotransmission, immune function, and tissue repair. Individuals from simplified habitats showed higher numbers of differentially expressed genes and changes for genes associated with synaptic plasticity and spatial memory. In addition, a reference transcriptome of A. saxatilis is presented here for the first time, serving as a resource for future molecular studies. This project enhances our understanding of how fishes are responding to the combination of coral reef degradation and thermal stress while elucidating the plastic mechanisms that will enable generalists to persist in a changing world.