Mandarin Valley is one of the most famous dive sites on Kapalai Island, being well known for excellent much diving. This is a great dive site found and it gets its name from the small dragonets, called mandarin fish that are found in abundance on this site. The site is just off the jetty and gently slopes down to about 20 metres making it a nice and easy relaxing dive site. Although much of the coral has been destroyed by dynamite fishing, the area has wonderful muck diving sites, and Mandarin Valley is no exception.

The visibility is around 10 metres and with little current, it is suitable for all divers. It is a great site for underwater macro divers and photographers and there is a lot of exploring to be done on the site.

Divers often visit the site at around dusk when it is easy to spot the colourful mandarin fish hiding amongst the corals. These are fantastically coloured fish with their vibrant colours and make a real treat for underwater photographers.

There are many sponges and sea urchins at this site and they host many different types of nudibranchs that are found in all sizes and colours. Divers will also spot leaf fish, pipefish, crocodile fish, frogfish, stonefish, and cuttlefish. Most of the marine life is hidden and camouflaged and so divers need to take a while to discover them. Stonefish, in particular, are difficult to spot but there are many that can be found in the area. They are joined by many crayfish, goby fish, dart fish, and many different juvenile reef fish.