The Diamondback Squid Thysanoteuthis rhombus is a globally distributed deep-sea species, one of only a few oegopsid nektonic cephalopods in which planktonic egg masses are well known. Here, we report three new T. rhombus egg masses found in the Bay Islands, Honduras, in 2020. Using the egg trace method, these egg masses provide one of the first indications that T. rhombus adults occur and spawn, and that their eggs hatch, in the Western Caribbean Sea. The first egg mass was 215 cm long and was stranded on an intertidal seagrass bed on Utila Island, from which we estimated 78,758 eggs. Two additional egg masses were photographed underwater: one in a scuba diving area near Utila Island, and one from the neighbouring Bay Island of Roatan. We reviewed possibilities that this squid could provide an alternative commercially valuable fishing and touristic resource for the Bay Islands. As part of our investigation, we conducted a comprehensive literature review plus an online search of citizen science, to provide an accurate count of egg mass observations to date, which resulted in a reference table of 108 T. rhombus egg masses known worldwide.