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The Bluebanded goby, Lythrypnus dalli, is a popular ornamental aquarium species and a key organism for the study of several fundamental biological questions, most notably reversible sex change in adults. To maximize the tractability of this species as an emerging model system, it is essential to have an optimized propagation system and a detailed developmental staging scheme. One limitation to the larviculture of L. dalli is the relatively small size of the larvae, which makes the transition from yolk to feeding challenging. We developed a protocol and successfully reared three generations of L. dalli in the laboratory. The protocol contains several key innovations for the rearing of diminutive fish larvae, including tank design and co-culturing of microalgae ( Isochrysis galbana) with copepods ( Parvocalanus sp. ) in the larval rearing tanks. In addition, we describe the embryonic and larval development of L. dalli under controlled conditions and in comparison with the model organism Danio rerio. We found that at 21°C L. dalli larvae hatch in 4 days, reach flexion in 18-25 days and are sexually mature by 3 months. Overall, the embryonic development of L. dalli is remarkably similar to D. rerio with several striking differences, including the position and shape of the blastomere, size of the neuromasts and corresponding cupula, and relative timing of pigmentation and brain subdivision. The ability to rear this species in captivity is a valuable tool that could be utilized for a variety of similarly diminutive species and to address a greater breadth and depth of biological questions. [ABSTRACT FROM AUTHOR]