Simple SummaryHarmful algae are those which release toxins to the aquatic ecosystems. Excessive growth of these algae can kill fish, create anoxia, impede aquaculture activities and contaminate aquatic food. Therefore, it is important to investigate their occurrence, diversity and abundance in pond aquaculture systems. In this study, we have identified 81 genera of harmful algae from 30 coastal homestead ponds mainly consisting of Microcystis spp. (30.14%) and Actinoptycus spp. (18.32%). Based on taxonomic classes, the community assemblage was dominated by Cyanophyceae, Chlorophyceae and Bacillariophyceae. Statistical analyses demonstrated that that dissolved oxygen, nitrates, phosphates, sulphates, salinity and transparency influence the abundance of identified algal genera.Algae are the naturally produced food for fish in any aquatic ecosystem and an indicator of a productive pond. However, excess abundance of harmful algae can have detrimental effects on fish health. In this study, the algal communities of 30 coastal homestead fish ponds were investigated to identify the diversity, assemblage and controlling environmental variables of harmful algae from a tropical coastal area. The findings showed that 81 of the 89 genera of identified algae were harmful, with the majority of them being in the classes of Cyanophyceae (50.81%), Chlorophyceae (23.75%), Bacillariophyceae (9.5%), and Euglenophyceae (8.47%). Microcystis spp. alone contributed 28.24% to the total abundance of harmful algae. Significant differences (p < 0.05) in algal abundance were found among the ponds with the highest abundance (470 ± 141.74 × 103 cells L−1) at pond (S25) near agricultural fields and the lowest abundance (109.33 ± 46.91 × 103 cells L−1) at pond (S14) which was lacking sufficient sunlight and nutrients. Diversity indices, e.g., dominance (D), evenness (J′), richness (d) and Shannon diversity index (H′) ranged from 0.17 to 0.44, 0.23 to 0.6, 0.35 to 2.23 and 0.7 to 1.79, respectively, indicating a moderate range of diversity and community stability. Community composition analysis showed the assemblage was dominated by Cyanophyceae, Chlorophyceae and Bacillariophyceae, whereas, multivariate cluster analyses (CA) identified 11 major clusters. To identify the factors controlling their distribution or community assemblages, eight environmental variables (temperature, pH, dissolved oxygen (DO), salinity, transparency, nitrates, phosphates and sulphate) were measured. ANOVA analysis showed that the variables significantly differed (p < 0.05) among the ponds, and canonical correspondence analysis (CCA) demonstrated that DO, nitrates, phosphates, sulphates, salinity and transparency have the most impact on the abundance of algal genera. In addition, analyses with Pearson’s correlation coefficient showed that the abundance of total algae, diversity and community were mainly governed by phosphates and sulphates. These results can be used to identify and control these toxic algal groups in the local aquaculture sector.