The differentiation and developmental trajectory of fish gonads, significantly important for fish breeding, culture, and production, has long been a focal point in the fields of fish genetics and developmental biology. However, the mechanism of gonadal differentiation in leopard coral grouper (Plectropomus leopardus) remains unclear. This study investigates the 17β-Hydroxysteroid Dehydrogenase (Hsd17b) gene family in P. leopardus, with a focus on gene characterization, expression profiling, and functional analysis. The results reveal that the P. leopardus’s Hsd17b gene family comprises 11 members, all belonging to the SDR superfamily. The amino acid similarity is only 12.96%, but conserved motifs, such as TGxxxGxG and S-Y-K, are present in these genes. Hsd17b12a and Hsd17b12b are unique homologs in fish, and chromosomal localization has confirmed that they are not derived from different transcripts of the same gene, but rather are two independent genes. The Hsd17b family genes, predominantly expressed in the liver, heart, gills, kidneys, and gonads, are involved in synthesizing or metabolizing sex steroid hormones and neurotransmitters, with their expression patterns during gonadal development categorized into three distinct categories. Notably, Hsd17b4 and Hsd17b12a were highly expressed in the testis and ovary, respectively, suggesting their involvement in the development of reproductive cells in these organs. Fluorescence in situ hybridization (FISH) further indicated specific expression sites for these genes, with Hsd17b4 primarily expressed in germ stem cells and Hsd17b12a in oocytes. This comprehensive study provides foundational insights into the role of the Hsd17b gene family in gonadal development and steroidogenesis in P. leopardus, contributing to the broader understanding of fish reproductive biology and aquaculture breeding.