Many animal species can rapidly change their body colouration and patterning, but often the ecological drivers of such changes are unknown. Here, we explored dynamic colour change in the bluelined goatfish, Upeneichthys lineatus, a temperate marine teleost species. Upeneichthus lineatus can change in a matter of seconds, from a uniform white colour to display prominent, vertical, dark red stripes. Initial observations suggested that rapid colour change in U. lineatus was associated with feeding and may act as a signal to both conspecifics and heterospecifics that are frequently observed to follow feeding goatfish. Field observations of the colour and behaviour of individual U. lineatus were collected to (1) document the repertoire of behaviours that U. lineatus displays and categorise associated colour patterns; (2) quantify the speed of dynamic colour change; (3) establish the context in which U. lineatus changes colour and pattern; and (4) test whether the behaviour of follower fishes is influenced by colour patterning or specific behaviours of the focal goatfish. We found that U. lineatus changed colouration from white to the red banded pattern in less than 10 s. The key driver of rapid colour change in U. lineatus was feeding, particularly when the fish fed with its head buried in sediment. Conspecific followers were most likely to be white in colour and adopt searching behaviour, regardless of the focal fish colour or behaviour. Other species of follower fish spent significantly more time following U. lineatus that were displaying dark red stripes when searching or eating, implying the red stripes may be an interspecific signalling mechanism. Our findings indicate that rapid colour change in teleost fish may be used for social communication and may provide U. lineatus with increased protection from predation when feeding via a safety‐in‐numbers approach.