Egg capsules of the squid Doryteuthis (= Loligo) opalescens were reared in the laboratory to assess the dependence of time-to-hatching (incubation time) and hatching success rate on temperature and light regime. Both incubation time and hatch duration were found to be inversely related to temperature. More than 96% of paralarvae hatch from eggs reared at temperatures between 9 and 14 °C. Hatch rate drops below 90% in warmer and colder water. No eggs hatch below 7 °C, and the upper limit of viability is near 25 °C. The vast majority (91%) of hatchlings emerged during the dark phase of the photoperiod. Egg capsules reared at 13.4 °C with a supposedly commensal polychaete, Capitella ovincola, had a slightly higher hatch rate than those without the annelid. Because eggs are naturally laid closely together, crowding was hypothesized to cause decreased ventilation and a lower hatch rate. Crowding was tested by placing two capsules (rather than one) into the small incubation chambers (50 ml). This treatment did not result in a lower hatch rate at 13.4 °C, but at 21.4 °C it decreased the hatch rate by 20%. Brood incubation duration is related to temperature by the equation: Incubation (days) = 14.97 + 177.40 × exp(−0.119 × Temperature –°C) (χ2 = 282.5, P = 0.001). Stable isotope analysis confirmed that C. ovincola worms eat the capsule matrix, not the paralarvae. These polychaetes had a δ15N value of 12.79‰versus 12.06‰ for squid paralarvae, and 10.54‰ for the gelatinous matrix of egg capsules. This fractionation factor ε of 2.25‰ is consistent with marine food webs. Provision of nutrients and shelter for the annelids and increased hatch rate for the squid embryos suggests a symbiotic relationship between these organisms.