Courtship behaviour, captive breeding, embryonic and larval developments of Nemateleotris decora and its rearing with suitable live feed were described. Different age groups (60–100 mm TL) were stocked (glass aquaria, 500 L) in outdoor transparent roofed hatchery at water temperature 29 ± 1 °C for pair formation. After 6 months of rearing, 4 pairs were formed. The size of the female ranged from 60 to 90 mm and males from 90 to 100 mm. Each pair was then stocked in 250-L perspex breeding tanks in the indoor breeding unit with a photoperiod of 14 L: 10 D by a 40-W bulb suspended at 20 cm above the water surface. The environmental parameters such as temperature, salinity, dissolved oxygen and pH, NO2, NO3 and NH3 were maintained at suitable levels and monitored once in 24 h. The pairs were daily fed with cooked meat of squid, shrimp, green mussel, raw fish egg mass at 10% of their body weight in four split doses and live adult artemia (10–15 per day). The pairs began to spawn after 6 months acquisition in the breeding tanks. Each spawning consisted of 400 to 500 eggs, which were elliptical in shape with a length of 1.1 ± 0.1 mm and a maximum width of 0.4 mm. The incubation period lasted for 96 h at a water temperature of 28 ± 1 °C, and most of the time, males guarded the eggs than did females. The embryonic development and colour changes of eggs during incubation were documented. The hatching percentage ranged from 93% to 98% at water temperature 29 °C. The size of newly hatched larva varied between 1.9 ± 0.1 mm long and the mouth gape varied between 90 and 110 μm, and its behaviour was also documented. Larval rearing was carried out in 250-L rectangular tanks using phytoplanktons Nannochloropsis oculata and Chlorella salina (1:1 proportion at 1–5 × 106 cells ml− 1), along with different combinations of live micro zooplanktons: Diet I (Brachionus rotundiformis from 1 to 7 dph and Brachionus plicatilis from 8 to 18 dph), Diet II (ciliates Euplotes sp. from 1 to 7 dph and B. rotundiformis from 8 to 18 dph) and Diet III: B. plicatilis from 1 to 18 dph and Diet IV (Calaniod copepod Acartia danae nauplii from 1 to 7 dph and B. rotundiformis from 8 to 18 dph). In all diets, Artemia nauplii were fed from 19 to 40 dph to standardize its larval rearing and were provided with 24 h light. All the zooplankton species except copepods were enriched using Algamac 2000. Out of the four tested diets, Diet II showed maximum survival rate (66% ± 0.23%) followed by Diet IV (40% ± 0.40%), Diet I (10% ± 0.61%) and Diet III (3% ± 0.46%). The larvae metamorphosed to juveniles within 35 to 40 days of post-hatch (dph). This is the first scientific report on breeding of N. decora under captivity.