Maintaining biological diversity is one of the central goals of global biodiversity and ecosystem management. The coastal waters off Shandong, located in the Yellow and Bohai seas of northern China, are important spawning and feeding grounds for many fishery species, and so play an important role in biodiversity maintenance. Assessing taxonomic diversity provides a new method for measuring and interpreting community relationships in the form of inter-species differences. It can be carried out simultaneously in different regions, habitats or surveys and has been widely used in fish community studies. In this study, index and characters of taxonomic diversity of fishes in the coastal waters off Shandong were examined. First, a list of fish in the study area was established. This list was based on several studies from published literature and was established from surveys conducted during 1998 and 2009. Fish classification and nomenclature was adopted from the Nelson classification system and synonymous species were excluded. Then the taxonomic diversity, including the average taxonomic distinctness (Δ+) and variation in taxonomic distinctness (Δ+), of fish assemblages was calculated based on the list of fish species. Finally, the survey list of fishes was superpositioned into the total list of fishes in the coastal waters off Shandong and the 95% confidence funnel was calculated. Results show that there were 225 species belonging to 2 classes, 28 orders, 91 families and 169 genera in the checklist of fishes in coastal waters off Shandong. In 2006 there were only 2 classes, 11 orders, 41 families, 50 genera in 1998, 1 class, 13 orders, 41 families, 71 genera and 78 species; and in 2009 there were 1 class, 9 orders, 32 families, 55 genera and 62 species. These results show that the numbers of fish species in coastal waters off Shandong declined in surveys taken between 1998 and 2009. Inclusion index at the taxonomic level was low; with usually only a single species in each genus. The average taxonomic distinctness was 66.1 and variation in taxonomic distinctness was 141.7. In surveys taken between 2006 and 2009, the average taxonomic distinctness was between 60.9 and 62.7 and the variation in taxonomic distinctness was between 65.4 and 92.3. The analysis of 95% confidence funnels showed that almost all surveys were lower than the theoretical mean and was out of 95% confidence funnel, which suggests that the diversity of fishes in coastal waters off Shandong has significantly decreased. The inclusion index of fishes in coastal waters off Shandong was in line with the trend that the inclusion index was higher in tropical waters and lower in high-latitude waters. The average taxonomic distinctness value in coastal waters off Shandong was higher than in other continental shelf waters in China. Due to the large numbers of estuaries, bays, and diverse habitats, the coastal waters off Shandong maintain a fish community with many morphological different species and have a high taxonomic diversity. After decades of overfishing, polluting and habitat loss, the species composition has significantly changed and the taxonomic diversity has significantly declined.