Phytoplankton marker pigments and their functional groups were identified for the first time in the Gulf of Mannar (GoM) and the Palk Bay (PB), located in the southeast coast of India using HPLC–CHEMTAX analytical techniques. The GoM generally remained more saline, productive (in terms of chlorophyll a) and less turbid than the PB during southwest and northeast monsoon periods. The diversity and concentration of marker pigments were high in the GoM, whereas the PB was characterized by high concentration of zeaxanthin, indicating the dominance of photosynthetic prokaryotes (cyanobacteria). The CHEMTAX analysis revealed that the phytoplankton biomass (chlorophyll a) in the PB was mainly derived from cyanobacterial community. However, abundance of fucoxanthin and peridinin in the GoM indicated microphytoplankton (20–200 µm) as the dominant group. The CHEMTAX results showed that more than 50% of chlorophyll a in the GoM was contributed by microphytoplankton, in particular diatoms and dinoflagellates. The substantial increase in the photoprotective carotenoids (PPCs) and photoprotection index (PI) in the PB was indicative of its low productivity, probably caused by the warm and turbid waters.