The toxicity of oxytetracycline (OTC) was evaluated in adult grass shrimp, Palaemonetes pugio. Initially, static acute (96 h) toxicity tests were conducted with shrimp exposed from 0 to 1,000 mg/L OTC. A calculated lethal concentration 50% value of 683.30 mg/L OTC (95% confidence interval 610.85–764.40 mg/L) was determined from these tests, along with a lowest-observable-effect concentration of 750 mg/L and no-observable-effect concentration of 500 mg/L. Moreover, chronic sublethal effects of OTC exposure on grass shrimp intestinal bacterial population were assessed using doses from 0 to 32 mg/L OTC. The total viable counts in digestive tract content had levels between 5.2 and 1 × 104 colony-forming units per gram of tissue at times 0 and 96 h, respectively. Aeromonas hydrophila were the most resistant isolates (27.78%) to OTC exposure. Vibrio alginolyticus showed significant positive growth following exposure to OTC, whereas other bacterial species abundance declined over time. A total of 268 bacterial isolates were screened using antibiotic resistance analysis from a library containing 459 isolates. Among the tested isolates from the OTC treatments, 15.4% were resistant to OTC and 84.6% were OTC sensitive. Oxytetracycline was generally not consistently quantifiable with liquid chromatography-mass spectroscopy technique in shrimp homogenates. The only peak detected was at the 32 mg/L dose of OTC at 96 h. Nevertheless, OTC had a significant biological effect on the bacterial population. Antibiotic resistance to five other antibiotics (penicillin G, sulfathiazole, trimethoprim, trimethoprim and sulfamethoxazole, and tetracycline) was strongly associated with OTC exposures. The present study indicates that OTC toxicity effects in P. pugio and changes in the shrimp microbial community would only be expected under special circumstances.