It can be found in reefs of the Indo-west Pacific region: from the Persian Gulf and Maldives to Japan, the Philippines, and Indonesia.

[4][5] The mailed butterflyfish (C. reticulatus) is a near-match of C. collare in appearance, save for a less brown hue and light blue instead of red in its black-based tail.

However DNA sequence and osteology data overwhelmingly agree that C. reticulatus belongs to the subgenus called "Citharoedus" (a name preoccupied by a mollusc genus).

This contains fish like the scrawled butterflyfish (C. meyeri), similar in shape and size but with a "finger-painted" pattern of a few prominent and uneven lines on a light silvery background.

[4][5] The highly anomalous 12S rRNA mtDNA sequence found in this species in one 2007 study seems to be due to a laboratory error; in another study a 12S rRNA sequence agreeing with the general pattern of mtDNA evolution in Rabdophorus was found.