Male jacky dragons, Amphibolurus muricatus, indicate territoriality to rivals during the mating season through the use of stereotyped motor displays. The relationship between corticosterone (B) and testosterone (T) and its effects on territorial display expression were investigated in captive lizards. Results demonstrated that territorial display production was most effectively predicted by elevated baseline T levels. This parallels the heightened T concentrations exhibited by males in the field during the spring mating period. The effect of social interaction on B and T levels was also examined by presenting territory-holding males with a size-matched male intruder. Resident males exhibited clear differences in the level of territorial response evoked by a male intruder, which were correlated with differences in physiological activity. Males that gave no territorial response had moderate B levels that did not change with social interaction, and significantly lower T levels than males that responded to the intruder with territorial displays. Among displaying males, those exhibiting low levels of territorial responses showed no change in B or T. In contrast, high-level territorial responders exhibited acute B increases when faced with an intruder, which might assist in supporting sustained metabolic activity and could possibly reflect differences in the perception of social stress. These same males also exhibited a reduction in T levels at such times, probably due to the acute rise in B. Combined, these results suggest that high circulating T is acting in a preparatory manner to increase the likelihood of producing a territorial response upon engaging in a social encounter. However, once this response has been initiated T may not need to remain elevated to allow continued expression of territorial behavior.