The subfamily Plectorhinchinae (sweetlips) is composed of poorly-known species with high commercially and ecologically values that exhibit phenotypic plasticity and various morphologies. Few studies have assessed the validity of sweetlips, intergeneric relationships and evolutionary survey in this subfamily, which have not yet been resolved. This study investigated the DNA sequences of (1) the mitochondrial COI gene to delimit species, and (2) two mitochondrial (COI and Cyt b), and one nuclear (RAG1) markers to infer phylogenetic relationships and evolutionary and biogeographic history. The molecular results could differentiate Diagramma punctatum from the other species, but failed to distinguish D. labiosum as a distinct species with considerably lower genetic distances for the COI (0.53%) and Cyt b (0.51%) markers. However, additional taxonomic investigations are required to shed light on this issue. All previously described nominal species of sweetlips in the northwest Indian Ocean were found to be well supported. The monophyly of Plectorhinchus is not supported and Diagramma pictum and D. punctatum should be assigned to the genus Plectorhinchus. The biogeographic history of Plectorhinchinae likely originated in the Indo-Pacific ca. 34 Ma (30–39 Ma; late Eocene/ middle Oligocene) and subsequently colonised the Western Indian Ocean and the Central Indo-Pacific. Maximum diversification within the subfamily occurred from the middle Miocene to Pliocene, coinciding with dispersal and vicariance events. Diversification was probably driven by both biological and geographical factors.