A study was carried out for six months to assess the diversity and seasonal variation of plankton in coastal waters receiving shrimp farm effluents (station 1) in comparison to reference site (station 2) of apparently unpolluted water. The study recorded 22 species of phytoplankton at station 1 and 29 species at station 2. With respect to zooplankton composition, station 2 recorded more number of species (42) followed by station 1 (35). The density of phytoplankton was found to be lower in station 1 (449 cells/l) compared to station 2 (565 cells/l). The maximum density of plankton was recorded during summer and observed to be a minimum in monsoon season respectively. In the observations made, the zooplankton density ranged from 12,800 (monsoon) to 1, 06,800 (summer) and 15,400 (winter) to 2, 07,000 (summer) at Station 1 and 2 respectively. In both the stations, maximum density of zooplankton was observed during summer and this might be due to the stability in salinity and higher phytoplankton levels. At Station 1 and 2, the species richness index 'D' for phytoplankton varied from 0.24 to 1.15 and 0.79 to 2.05 whereas the species richness index 'D' for zooplankton in station 1 and 2 varied from 1.16 to 2.59 and 1.09 to 3.84. During the study period in all the stations, the species diversity index ('H') for the phytoplankton ranged from 0.45 to 1.95. The zooplankton diversity index ('H') ranged from 1.87 (monsoon) to 2.91 (summer) at station 1 and 1.66 (winter) to 3.25 (summer) at station 2. The study revealed that the plankton diversity in coastal waters receiving shrimp farm effluent (Station 1) was significantly influenced by seasonal variations, pollution load and other environmental factors when compared to the unpolluted coastal waters of station 2.