ABSTRACT We constrain the newly introduced decorated halo occupation distribution (HOD) model using SDSS DR7 measurements of projected galaxy clustering, $w$p(rp) of galaxies in r-band luminosity-threshold samples. The decorated HOD is a model for the galaxy–halo connection that augments the traditional HOD by allowing for the possibility of galaxy assembly bias: galaxy luminosity may be correlated with dark matter halo properties besides mass, Mvir. We demonstrate that it is not possible to rule out galaxy assembly bias using DR7 measurements of galaxy clustering alone. Moreover, galaxy samples with Mr < −20 and Mr < −20.5 favour central galaxy assembly bias. These samples prefer scenarios in which high-concentration haloes are more likely to host a central galaxy relative to low-concentration haloes of the same Mvir. We formally rule out zero assembly bias with high significance for these samples. In the particular case of the Mr < −20 sample, zero assembly bias is excluded at greater than the 3σ level. Satellite galaxy assembly bias is preferred for the faintest sample we study, Mr < −19. We find no evidence for assembly bias in the Mr < −21 sample. Assembly bias should be accounted for in galaxy clustering analyses or attempts to exploit galaxy clustering to constrain cosmology. In addition to presenting the first constraints on HOD models that accommodate assembly bias, our analysis includes numerous improvements over previous analyses of this data set and supersedes previously published results, even in the case of a standard HOD analysis.