A conference official declined to give details, but the release says Demarest was suspended under a sportsmanship rule that governs obscene gestures and language toward other people during games.
The conference said in a release Tuesday that Demarest, in his second year as a position coach with the Warriors, is prohibited from coaching during Hawaii's next game Sept. 21 at Nevada.
Hawaii coach Norm Chow said in a statement that the situation is unfortunate and the team will abide by the penalty.
Hawaii (0-2) lost 33-14 to Oregon State on Saturday. The Beavers (1-1) outscored the Warriors 19-0 in the second half.