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Here we report a mechanism that reduces dispersal of early developing stages and larvae in a free-spawning intertidal and shallow subtidal tunicate, Pyura praeputialis (Heller 1878), in the Bay of Antofagasta, Chile. The spawning of gametes by the tunicate into the naturally turbulent aerated seawater decreases their surface tension and induces the formation of a bio-foam. Water collected from foamy intertidal pools and tide channels showed a high concentration of P. praeputialis early developing stages and tadpole larvae in the foam. Because gametes are synchronically spawned for external fertilization and larvae settle near adults, our results suggest that this bio-foam increases fertilization success and effective settlement of their short-lived larvae in the vicinity of the adults spawning the gametes. This mechanism reinforces published evidence suggesting that local retention of intertidal and inshore marine invertebrate larvae may be more common than previously thought, offering, for instance, new perspectives for the design and networking of marine protected and management areas. [ABSTRACT FROM AUTHOR]