The sustainability of aquarium trade relies on successful captive breeding and seed production practices to prevent the long-term consequences of wild collection, which can result in irreversible damage to natural populations. To establish comprehensive breeding and seed production protocols, it is imperative to gain a deep understanding of the reproductive characteristics of the fish, encompassing aspects such as sexual dimorphism, spawning behavior, embryogenesis, and the crucial period of larval survival. Hence, in this study, we document the captive breeding, spawning behavior, embryonic development, and early larval stages of Chromis viridis, a highly sought-after marine ornamental fish that plays a prominent role in the aquarium trade. Fish were sourced from Agatti Island, Lakshadweep, and reared in controlled conditions. Mature fish (6–9 cm) were kept in 500 L FRP tanks with regulated salinity (35.4 ± 0.5 g/L), temperature (27.1 ± 0.54 °C), and a 12-h light-dark photoperiod. After four months in captivity, spawning commenced, characterized by intense substrate cleaning and rapid swimming motions of the male. Each spawning event yielded 3562 to 20,651 eggs. Egg development included five stages over three days at 27.1 ± 0.54 °C, with hatching on the third day. Egg dimensions varied along both axes and egg volume changed over three days. Newly hatched larvae lacked eye pigments and paired fins, with an average total length (TL) of 1.97 ± 0.35 mm. Larval mouth opening occurred at 38 h, and yolk absorption was complete by the third day post-hatch. Continuous captive reproduction was observed with a spawning frequency of 5.59 ± 0.96 days. This study offers valuable insights for standardizing captive propagation techniques and advancing marine ornamental aquaculture for C. viridis by documenting its breeding, embryonic development, and early larval stages in captivity.