Phytoplankton species are sensitive to environmental and seasonal variability. This property of phytoplankton can be used to predict and study fluctuations in the ecological health of the system. In this study, phytoplankton diversity and its direct interactions with abiotic components of the ecosystem were studied to evaluate the health and stability of the coastal waters of Veraval, Gujarat coast, India. Results showed that diatoms dominated the ecosystem with a strong seasonal pattern of community succession. Waters were well churned and turbidity hindered penetration of light into deeper layers during the fall and winter monsoon season whereas stratification during spring inter-monsoon governed the distribution of different phytoplankton groups in the water column. These seasonal shifts resulted in a sincere pattern of annually re-occurring seasonal succession and formation of bloom events in the region. Apart from general phytoplankton diversity and its seasonal succession, the study intended to understand the forces governing the diversity and ecological system as a whole. To meet this objective, percent light intensities of chlorophyll-a, at various depths and temperatures were studied in relation to phytoplankton density. The correlation did not stand well for stations having active bloom formation showing that chlorophyll-a cannot be used as a proxy of phytoplankton biomass during bloom conditions. Thus excluding the points corresponding to active bloom conditions, second order polynomial equations were developed explaining the changes in chlorophyll-a concentration with variations in phytoplankton cell counts for study seasons. It was observed that most phytoplankton cells preferred upper well-lit layers of the water column with 100% light intensity followed by depths with 50% and 1% light intensities respectively. Study on temporal dynamics of the phytoplankton community in relation to temperature showed that the winter monsoon was characterized by a temperature range of 21.9 °C to 29 °C where Navicula distans was the most abundant phytoplankton species. Skeletonema costatum was the most abundant species at 27.2 °C during fall intermonsoon. Spring inter monsoon had an abundance of Navicula distans at both 28.35 °C and 28.9 °C.