Pteria penguin is an important commercial bivalve species that is used in the production of half pearls known as mabè. Expansion of this industry in places with low natural spatfall is reliant on hatchery production of juvenile oysters, which begins with the incubation of fertilized eggs. This study addresses the issue of mortality during egg incubation by examining the effects of egg stocking density and the application of antibiotics. A factorial experimental design was implemented combining 3 egg densities (10, 50, and 100/mL) and 3 antibiotic treatments (control, no antibiotic; 5 mg/mL streptomycin—sulfate; 5 mg/mL tetracycline—erythromycin 2.5:2.5 mg/mL). Antibiotics were added to the culture medium as a single dose and fertilized eggs were incubated for an industry standard period of 24 h. Despite a 23% increase in mean survival during incubation, aquaria treated with tetracycline—erythromycin (1:1) yielded an average of only 9% more veliger larvae than control aquaria as a result of interference with development during the transition of trochophore to shelled larvae (D-stage). Application of the antibiotic streptomycin—sulfate improved mean survival by 16% compared with control aquaria, without significantly compromising development. A high egg density of 100/mL did not significantly reduce survival, but resulted in a 5% reduction in normal development to D-stage. The results of this study show that if tank space is limited during egg incubation, utilizing a high stocking density of 100 eggs/mL will provide the greatest number of D-stage larvae. However, if the supply of eggs is limited, we recommend stocking P. penguin eggs at a density ≤50/mL and minimizing mortality by treating the culture medium with the antibiotic streptomycin—sulfate.