Recently, butterflies have been frequently utilized as bioindicators for assessing environmental changes. Over the last few decades, urbanization and modernization in northeast India have taken place at an overwhelming and very fast pace. In this study, butterfly diversity and habitat preferences were evaluated in the Zunheboto district of Nagaland, India. The aim of this study was to evaluate the changes in species composition across different habitats over time. This study recorded 43 species across six families and employed direct observation methods across jhum fields of different ages (15 years and 5 years) and village areas to derive species richness and diversity indices. Our results indicate the significant presence of 24 species in the Nymphalidae family, suggesting high adaptability to various habitats. The more recent jhum fields showed an increase in biodiversity, resulting in vegetation destruction and thus more light penetration; hence, it becomes easier for generalist species to colonize. The study also underlines the ecological significance of village areas as biodiversity hotspots supporting unique species not found in agricultural fields. These findings highlight the need for habitat preservation and emphasize the potential resilience of butterfly populations to environmental changes under sustainable management. This paper sheds light on the changes in butterfly diversity with respect to habitat changes and underlines the necessity of conservation strategies to incorporate habitat protection and sustainable land use practices.