Mathematical modelling regarding evolutionary theory typically assumes that optimal strategies are not constrained through mechanistic processes. In contrast, recent studies on brain anatomy and neurobiology suggest that flexibility in social behaviour is rather constrained by the physiological state of the social decision-making network. Changing its state may yield selective advantages in some social contexts but neutral or even detrimental effects in others. Here we provide field evidence for such physiological trade-offs. We subjected wild female cleaner wrasse to injections of testosterone or of saline solution (control) and then observed both intraspecific interactions and interspecific cleaning behaviour with other reef fish, referred to as clients. Testosterone-treated females intensified intraspecific social interactions, showing more aggression towards smaller females and tendencies of increased aggressive and affiliative contacts with dominant males. Such testosterone-mediated changes fit the hypothesis that an increase in testosterone mediates female’s focus on status in this protogynous hermaphrodite species, where females eventually change sex to become males. Moreover, we also identified other effects on interspecific social interactions: testosterone-treated females interacted less with client reef fishes and hence obtained less food. Most importantly, they selectively reduced service quality for species that were less likely to punish after being cheated. Overall, our findings suggest that testosterone causes pleiotropic effects on intra and interspecific social behaviour by broadly influencing female cleaners’ decision-making.