Influence of seasonal variations in environmental parameters on fish assemblage and species diversity patterns was studied in a tropical reservoir of Central India during March 2021 to February 2022. A total of 41 species belonging to 7 orders, 15 families and 29 genera were recorded with highest diversity during post‐monsoon season compared to the pre‐monsoon season and monsoon season. The fish abundance similarity between the monsoon and post‐monsoon reached a maximum of 89%. Seasonal variations in the mean species abundance, Simpson dominance index, Shannon diversity index, Pielou's evenness index and Margalef's richness index were determined. One‐way ANOVA revealed a significant difference (P < 0.05) at the temporal scale. There was a significant seasonal difference in species abundance (P = 0.0006) and evenness index (P = 0.02) among the diversity indices. During the study period, three ‘vulnerable’ species, three ‘near threatened’ species and two ‘endangered’ species were caught. Carnivore dominance was evident throughout the year in the trophic guild of fishes. The Pearson correlation test revealed that water pH, dissolved oxygen, sediment organic carbon and clay percentage were positively correlated to all four diversity indices. Simpson and Margalef species richness diversity indices were positively correlated to sediment pH. Fish abundance was positively associated with sediment pH, silt, phosphorus and nitrogen content. Canonical correspondence analysis was used to investigate the relationships between fish assemblages and environmental conditions. Among the 19 physicochemical parameters, nine (dissolved oxygen, total dissolved solids, conductivity, transparency, hardness, phosphate and chlorophyll‐a, sediment nitrogen and phosphorus) characteristics were shown to be statistically significant (P < 0.05) in determining fish diversity. Dissolved oxygen, total dissolved solids, conductivity, transparency, hardness, phosphate and chlorophyll‐a of water and sediment nitrogen and phosphorus qualities were the key factors for the species abundance. The reservoir boasts a diverse fish population that allows multi‐species fishing and generates revenue for numerous local fishers. Fish habitats should be protected in order to maintain diversity and long‐term ecological benefits.