The present study describes the embryonic developmental process of the bioluminescent ostracod crustacean Vargula hilgendorfii. Optical microscopy, scanning electron microscopy, DAPI staining and video recording were used for observations. This study is the first detailed report of the embryonic development of a myodocopid ostracod. Contrary to previous studies, cleavage occurred in the yolk sphere and no evident cleavage furrow was found. No nauplius stage was found, and five pairs of appendages developed simultaneously. A bivalved carapace developed from two independent buds of the carapace valves. The buds of the left and right valves are enlarged, and become combined. The combined ‘one-piece’ carapace was divided by the formation of a hinge, and the usual bivalved carapace was formed. On the 16th day, embryos hatched as juveniles with six pairs of appendages, a pair of immature appendages, a pair of compound eyes, a median eye and a bivalved carapace. An important suggestion for the classification of Ostracoda is derived from the observed development of appendages and carapace, because the subclass Ostracoda is defined mainly by the similarities of appendages and the bivalved carapace. The present observations clearly show that the developmental process of Myodocopa differs from that of Podocopa, and supports polyphyly of the Ostracoda.