Freshwater shrimps in the family Atyidae exhibit one of two life history traits: amphidromy, in which planktonic larvae develop in the sea; and landlocked, in which lecithotrophic larvae develop in freshwater. Temperature and salinity are the most important environmental factors that affect the survival, duration, and growth of decapod crustacean larvae. Larvae of landlocked shrimps are known to retain the ancestral habit of amphidromy, i.e., the ability to develop to the juvenile stage in saline water. Faster development exhibited by large larvae of landlocked shrimps is considered an adaptation that allows the larvae to stay in or near parental habitats. Therefore, information on larval performance under different temperature and salinity conditions is essential to obtain a better understanding of population connectivity through marine larval dispersal in amphidromous shrimps as well as larval adaptation to freshwater environments in landlocked shrimps. We examined the effects of temperature and salinity on the larval performance of two closely related atyid shrimps in the genus Paratya: the amphidromous P. compressa and the landlocked P. improvisa. Larvae were reared under the 25 combinations of five different temperatures (20, 23, 26, 29, and 32°C) and salinity levels (4.25, 8.5, 17, 25.5, and 34 ppt). In P. compressa, the rate of larvae that survived into the juvenile stage decreased linearly with increasing temperature and the larvae adapted to a wider range of salinity (8.5–34 ppt), though larval mortality increased at the high salinity (34 ppt) under the higher temperature conditions. In P. improvisa, larval survival rates were higher under a wider range of temperatures (20–29°C) in brackish water (4.25–17 ppt). Thus, P. compressa larvae may disperse broadly under the high salinity conditions of the open sea, but oceanic currents with high temperature and high salinity conditions may act as a barrier to restrict larval dispersion northwards from the southern islands.Paratya improvisa larvae adapted to a wider range of temperatures in natural freshwater environments and larval duration was shorter in P. improvisa than in P. compressa under the wide range of temperature and salinity conditions. Our results also highlight the retention strategy by which landlocked P. improvisa larvae stay in or near parental habitats