Wild-caught larvae, attributed to the lobster shrimp Axius serratus, consisting of two zoeal stages and a decapodid (megalopa), are described in detail. Parentage of larvae was ascertained based on geographic distribution of axiideans and gebiideans ( =  former thalassinideans) within the study area and close morphological resemblance to other congeneric larval stages. Larvae of A. serratus represent the first described ‘thalassinidean’ larvae from Canadian Atlantic waters and the first for Axiidae within the northwest Atlantic. Among axiidean larvae, those of A. serratus most closely resemble larvae of A. stirhynchus from the eastern Atlantic. Distinct features include the spination of the pleon that set A. serratus zoeae apart from those of most other ‘thalassinideans’ but that, in combination with a telson very similar to Homarus americanus, contributes to the general resemblance of A. serratus larvae to those of the American lobster. The primary distinction between these taxa is the presence of a chela on the third pereiopod in the latter that is not present in the former. In view of these appendages being prone to loss or damage, other characters that separate these taxa are listed and discussed. Given the uncertain status of some taxa within Axiidae and limited detailed information of larvae with certain parentage, difficulties in delineating the family based on larvae persist, as they do for cladistic analyses using adult morphology and molecular approaches.