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Hiding Places
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Many popular saltwater fish are territorial or skittish. A nervous fish will usually feel safer if has a place to hide to or retreat. Oddly, nervous fish will usually spend more time out in the open if they know they have multiple hiding places to retreat to. When you keep territorial fish, rocks and other decorations can help them determine the edges of their territories, and give fish lower in the pecking order a place to hide and regroup.
Water Chemistry
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Some rocks affect water chemistry in a positive way. All saltwater fish come from water that has a higher pH and hardness than most freshwater. Certain rocks promote this type of water chemistry. For example, many calcium-rich rocks like sandstone or limestone will slowly dissolve into aquarium water, raising the pH and hardness. In reef aquariums, this is even more important, since corals and other invertebrates absorb calcium from the water so quickly that it needs to be replenished. These rocks can help passively increase the calcium levels of water.
Live Rock
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Live rock is a special case. Live rock consists of old, dead coral, colonized by other organisms. Most importantly, this includes bacteria that break down ammonia and other fish waste into less toxic chemicals. While expert opinions vary, most schools of thought on saltwater aquariums hold that live rock is an important̵2;if not key̵2;source of biological filtration. However, you may need to "cure" live rock before adding it to an aquarium. Sometimes the shipping process leaves the rock coated in dead and dying organisms that need to be given time to rot away before you add the rock to the main aquarium.
When to Avoid Rocks
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In a few specialized cases, rocks can harm fish. Some very delicate, very active fish may injure themselves on rock. It's often recommended to keep shark, ray and jellyfish aquariums free of rocks, since these fish and inverts are prone to injury. If you want to use live rock in such a setup, you have the option of adding it to a sump, a separate container of water plumbed to the main aquarium through gravity drains and water pumps.
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Do Saltwater Fish Need Rocks?
For most saltwater fish, rocks play a number of important roles. Rocks can provide hiding places, helping your fish feel safe. Additionally, certain types of rocks can improve water chemistry and filtration. However, in some cases you should not use rocks in a saltwater aquarium.