The evolution of parental care opens the door for the evolution of brood parasitic strategies that allow individuals to gain the benefits of parental care without paying the costs. Here we provide the first documentation for alloparental care in coral reef fish and we discuss why these patterns may reflect conspecific and interspecific brood parasitism. Species-specific barcodes revealed the existence of low levels (3.5% of all offspring) of mixed interspecific broods, mostly juvenile Amblyglyphidodon batunai and Pomacentrus smithi damselfish in Altrichthys broods. A separate analysis of conspecific parentage based on microsatellite markers revealed that mixed parentage broods are common in both species, and the genetic patterns are consistent with two different modes of conspecific brood parasitism, although further studies are required to determine the specific mechanisms responsible for these mixed parentage broods. While many broods had offspring from multiple parasites, in many cases a given brood contained only a single foreign offspring, perhaps a consequence of the movement of lone juveniles between nests. In other cases, broods contained large numbers of putative parasitic offspring from the same parents and we propose that these are more likely to be cases where parasitic adults laid a large number of eggs in the host nest than the result of movements of large numbers of offspring from a single brood after hatching. The evidence that these genetic patterns reflect adaptive brood parasitism, as well as possible costs and benefits of parasitism to hosts and parasites, are discussed.