This was done primarily to supply the demand for the species, but has also led to line-breeding of the fish in order to accentuate the bright red and orange of their dorsal fins. The popularity of the Cockatoo Dwarf Cichlid has led to them being primarily raised in fish farms as opposed to being collected in the wild. While Cockatoo Dwarf Cichlids are popular within the hobby due to their ease of care and willingness to adapt to aquarium life, most hobbyists choose to keep them for their unique engaging personalities and brilliant finnage coloration. However, as with most all tropical fish species, changes in water parameters should occur gradually and not subject the fish to extreme shifts in water conditions. This tolerance for a range of pH and water temperature parameters helps to make Apistogramma cacatuoides excellent candidates for aquarium life. Their natural habitat consists of shallow waters that are much more susceptible to both pH and water temperature fluctuations, than the larger rivers and flood plains that many Cichlids come from. Unlike many South American Cichlid species that originate from blackwater, low pH habitats, the Cockatoo Dwarf Cichlid originates from small white water and clear water streams and shallow lakes that form during the rainy season. Originally collected from clear water streams throughout Peru, Colombia and Brazil, the Cockatoo Dwarf Cichlid (Apistogramma cacatuoides) is now due to its popularity with the aquarium hobby mostly raised in Asian fish farms.

Cockatoo cichlid