Urban development has led to substantial fragmentation of natural habitats of wildlife, depletion of water resources, and increase in air and soil pollution resulting in significant impact on biodiversity and ecological processes. Butterflies are good biological indicators of anthropogenic disturbance of environment. Considering the impact of habitat fragmentation and change in environment and climate variables, this study was undertaken to study butterfly diversity in and around the expanding Gelephu town in southern Bhutan. The survey was carried out from January to December, 2015 with an objec-tive to generate baseline information on the presence and status of butterflies in the urban area of Gele-phu. A total of 56 species of butterflies belonging to 5 different families were recorded. Family Nym-phalidae had the highest number of species (46%, n = 26) and the lowest was represented by family Papilionidae (5%, n = 3). Establishment of Green Park in the urban area could create good habitat for increasing butterfly biodiversity in urban area of Gelephu.