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Synopsis The butterfly fishes under the family Chaetodontidae are one of there most conspicuous elements of the coral reef community. The butterfly fishes are very closely related to angel fishes in their colour pattern. The butterfly fishes gets its name because of its comb shaped teeth. They are brightly coloured, estimated 125 species in 10 genera with Chaetodon (90 species) in the world. Among the 750 coral reef fish species recorded from Andaman and Nicobar Islands, Butterfly and Parrot fishes under the family Chetodontidae and Scaridae show a very rich biodiversity and species richness in a healthy coral reef. Butterfly fishes species richness is greatest in the central Indo-Pacific region. These families occur widely in tropical, subtropical and temperate coral reef habitat. This study also investigates butterfly fishes as habitat indicators and plays a role as key species for use in coral reef ecosystem monitoring and management, emphasizing knowledge in butterfly fish ecology and systematic. Studies of butterfly fish occurrence and abundance in natural habitats have also been discussed.