Progress in the Sydney rock oyster Saccostrea glomerata industry, through the adoption of oyster spat selected for faster growth and disease resistance, has been hampered by long-term variability in commercial hatchery spat supply. As part of a broader study to evaluate spat production impediments, the chronic toxicity of substances commonly used in bivalve hatcheries and the effects of handling procedures during early ontogeny (embryo to D-veliger) were evaluated. Among the substances tested, chlorine, Virkon S and Virkon S for Aquaculture (virucidal disinfectants, Antec International Limited, Suffolk, UK), bore water and stored rainwater were found to significantly affect larval development at practically/commercially-relevant concentrations. Toxicity was determined by quantifying embryo-larval development after 48 h exposure and three tests were performed for each substance or procedure. Concentrations of 0.83–1.66 mg L−1 of chlorine in seawater and 0.05–0.5 mg L−1 of Virkon S in seawater significantly decreased the normal development of embryos after 48 h exposure. An EC50 value of 0.76–1.18 mg L−1 for chlorine in seawater and 0.47–1.01 mg L−1 for Virkon S in seawater was derived. The EC50 value for Virkon S for Aquaculture was 0.99–1.12 mg L−1 and this substance caused significant development problems for larvae at a concentration of 0.5 mg L−1 in seawater. Tests that added stored rainwater to seawater had a significant decrease in the percentage of embryos developing to the D-veliger stage at concentrations greater than 1%, whilst no effect was detected at 0.1%. The EC50 value for rainwater was 0.67% to 2.29%. Similarly, bore water added to seawater caused a significant decrease in the percentage of embryos to develop to the D-veliger stage at a concentration of 10% and no effect was observed at 1%. The EC50 value for bore water ranged between 2.3 and 3.7%. Handling procedures for screening fertilized eggs did not significantly decrease development percentage after 48 h incubation time. Likewise, tests conducted with de-ionized water at concentrations up to 10% added to seawater did not significantly reduce the percentage of embryos to develop to the D-veliger stage after 48 h exposure. This study highlights the sensitivity of S. glomerata larvae to surfactants and disinfectants and identified contaminated water sources.