The paper presents the first detailed study on systematics, otolith structure and biology of Diaphus coeruleus, from the south-eastern Arabian Sea. The closely related and co-inhabiting species D. coeruleus and D. watasei are distinguished on the basis of morphometric, meristic and otolith characters. Analysis of gut content revealed that these fishes mainly feed on deep sea squids and shrimps. Six maturation stages of gonads are identified in males (immature, quiescent, mature, ripe, spawning and spent) and five stages (immature, quiescent, mature, ripening and spawning stages) in females. Overall sex ratio deviated in favour of males (1 male: 0.2 female) and the mean fecundity was 2150 ± 353 eggs. The length-weight relationship shows an overall isometric growth in males with N = 76 and b = 3.13 and for females with N = 17 and suggests negative allometric growth (b = 1.719). Otolith length (LO) and otolith weight (WO) are positively correlated to standard body length (LS) and body weight (BW).