Harmful algal blooms (HABs) have been documented along the coasts of India and the ill effects felt by society at large. Most of these reports are from the Arabian Sea, west coast of India, whereas its counterpart, the Bay of Bengal (BOB), has remained unexplored in this context. The unique characteristic features of the BOB, such as large amount of riverine fresh water discharges, monsoonal clouds, rainfall, and weak surface winds make the area strongly stratified. In this study, 19 potentially harmful species which accounted for approximately 14% of the total identified species (134) of dinoflagellates were encountered in surface waters of the BOB during November 2003 to September 2006. The variations in species abundance could be attributed to the seasonal variations in the stratification observed in the BOB. The presence of frequently occurring HAB species in low abundance (≤40 cell L^− 1) in stratified waters of the BOB may not be a growth issue. However, they may play a significant role in the development of pelagic seed banks, which can serve as inocula for blooms if coupled with local physical processes like eddies and cyclones. The predominance of Ceratium furca and Noctiluca scintillans, frequently occurring HAB species during cyclone-prone seasons, point out their candidature for HABs.