Biodiversity surveys are crucial for monitoring the status of threatened aquatic ecosystems, such as tropical estuaries and mangroves. Conventional monitoring methods are intrusive, time-consuming, substantially expensive, and often provide only rough estimates in complex habitats. An advanced monitoring approach, environmental DNA (eDNA) metabarcoding, is promising, although only few applications in tropical mangrove estuaries have been reported. In this study, we explore the advantages and limitations of an eDNA metabarcoding survey on the fish community of the Merbok Estuary (Peninsular Malaysia). COI and 12S eDNA metabarcoding assays collectively detected 178 species from 127 genera, 68 families, and 25 orders. Using this approach, significantly more species have been detected in the Merbok Estuary over the past decade (2010–2019) than in conventional surveys, including several species of conservation importance. However, we highlight three limitations: (1) in the absence of a comprehensive reference database the identities of several species are unresolved; (2) some of the previously documented specimen-based diversity was not captured by the current method, perhaps as a consequence of PCR primer specificity, and (3) the detection of non-resident species—stenohaline freshwater taxa (e.g., cyprinids, channids, osphronemids) and marine coral reef taxa (e.g., holocentrids, some syngnathids and sharks), not known to frequent estuaries, leading to the supposition that their DNA have drifted into the estuary through water movements. The community analysis revealed that fish diversity along the Merbok Estuary is not homogenous, with the upstream more diverse than further downstream. This could be due to the different landscapes or degree of anthropogenic influences along the estuary. In summary, we demonstrated the practicality of eDNA metabarcoding in assessing fish community and structure within a complex and rich tropical environment within a short sampling period. However, some limitations need to be considered and addressed to fully exploit the efficacy of this approach.