Abstract: Commercialization of pearl culture requires large scale hatchery production of larvae. The survival of larvae depends on stocking density, environmental factors, diets and diseases. The results of experiments using 4 stocking densities at the rate of 100, 1000, 2000 and 3000 larvae L^-1 of filtered sea water indicated highest survival of 15.8 and 10.5% in the low stocking densities followed by 1.4 and 0.34%, respectively in other two stocking densities at an ambient temperature of 28.6±0.4°C. Although, the larvae were fed with Isochrysis galbana at the recommended cell densities, a positive correlation between increased bacterial load and pearl oyster larval survival was recorded in all the stocking densities. Eventhough, total number of spat produced in 100 and 1000 larvae L^-1 stocking density was more or less similar and considering the management strategies including man power, cost of production of microalgal culture and infrastructure facilities such as availability of tanks and space in an established hatchery the stocking density of 1000 larvae L^-1 will be optimum for commercial hatchery production of pearl oyster larvae.