Apistogramma agassiziii is a small, sexual dimorphic, and territorial fish. The males are larger, more colorful, and have more prolonged fins compared to females of the species. Body color and fin length are important characteristics during courtship and mating in the breeding seasons where larger males are more likely to control better quality territory and have more access to food. The larger and more colorful males are preferred by buyers of ornamental fish.
Both males and females undergo four developmental phases of gonad maturation: immature, developing, spawning capable, and regressing. Mature females release a single batch of oocytes once in each breeding season.