Comparison of ontogenetic trajectories with those inferred for ancestors provides a powerful but underused tool for the study of the evolution of different types of phenotypic characters. This approach was used to study morphological and behavioral evolution of the highly dimorphic chaenopsid genus Coralliozetus (Teleostei: Blennioidei). All sexually dimorphic synapomorphies of Coralliozetus involved evolution in females only; one character evolved via terminal addition (peramorphosis), whereas six evolved via terminal deletion (paedomorphosis). Evolution of the ontogeny of two behavioral characters (microhabitat use and feeding rate), as inferred by focal animal observations of eight species of tube blennies, was also confined to females and conformed to terminal deletion. Both sexes of outgroups and males of all species of Coralliozetus exhibit an ontogenetic shift from the open as juveniles to shelters as adults. However, females of all species of Coralliozetus retain the juvenile behavior of residing in the open. Blennies residing in the open take significantly more feeding bites than conspecifics residing in shelters, consequently, female Coralliozetus retain the high feeding rate of juveniles. Several of the paedomorphic morphological features of Coralliozetus females are plausibly associated with their paedomorphosis in microhabitat use. These include their reduced conspicuousness and reduced robustness compared to conspecific males. In groups such as chaenopsids, which undergo significant ontogenetic changes in microhabitat, paedomorphosis provides a mechanism for rapid coevolution of behavior and morphology. This study, the first to document the evolution of sexual dimorphism via both behavioral and morphological paedomorphosis, demonstrates the unique insights to be gained from a multidimensional analysis of phenotypic evolution.