[4] The yellow-dotted butterflyfish is found throughout the Indo-Malayan region from northern Java eastwards to the north coast of Papua New Guinea and northwards to Taiwan and on to the Ryukyu Islands and Kashiwa-jima in southern Japan.

[1] The yellow-dotted butterflyfish is found on coastal reefs, primarily on rubble slopes from 8–50 metres (26–164 ft) in depth.

[4] They are normally encountered in pairs, however, juveniles are found solitarily near coral outcrops while the adults prefer rubble or sandy bottoms.

[3] The yellow-dotted butterflyfish was first formally described in 1853 by the Dutch physician, ichthyologist and herpetologist Pieter Bleeker (1819-1878) with the type locality being given as Lawajong on Solor Island in Indonesia.

[5] The specific name selene means "moon" and although Bleeker did not explain its allusion it is thought to be a reference to the black crescent shaped band running from the back of the head to the anal fin.