We studied the effects of environmental conditions experienced during embryonic and larval phases on development and larval survival of the marine shrimp Palaemon serratus, and examined how these conditions modified the relationship between larval and maternal pheno types. Egg-carrying females were incubated at different temperatures (12 and 18°C), and freshly hatched larvae were exposed to a combination of temperatures (18 and 24°C), salinities (25 and 32 PSU) and food conditions (ad libitum vs. limited). Temperatures experienced by embryos had no significant effects on development, and only weak effects on survival, whereas environmental conditions experienced by larvae had strong effects on development—the duration of development was longer at lower temperatures and under food-limited conditions, and food limitation increased the number of larval instars necessary to reach the juvenile phase (especially at the highest temperature), perhaps reflecting a mismatch between increased metabolic demands and reduced energy supply. Links between larval and female phenotypes were evident: large females generally produced significantly larger larvae than smaller females. In larvae reared under food limitation, average development time and number of instars required to reach the juvenile phase were negatively correlated with average larval body mass at hatching. Thus, larval development is linked to initial larval body mass and female body size; however, these links can be modified by environmental conditions experienced by the larvae. In situations of high temperatures and food limitation, larger P. serratus females may play a more important role in the maintenance of populations, as they produce large offspring capable of ameliorating the effects of temperature and food limitation on development.