We describe the larval development of the sparid Pagellus natalensis based on 34 field specimens of 2-19 mm from the western Indian Ocean off South Africa. P. natalensis has unusual larval morphology for a sparid: in particular, extensive head spination including a serrate supraoccipital crest, serrate supraocular, pterotic, and supracleithral ridges, interopercular spines, strong preopercular spination, and pitted frontal bones. Development in the family Sparidae is briefly reviewed, and larval development of P. natalensis is central to this review. We suggest that larval morphology reveals much about sparid relationships, and pose several hypotheses for further testing. These include: Pagellus, Pagrus and Dentex as currently conceived are polyphyletic; Pagellus affinis, bellottii and natalensis and Pagrus pagrus are closely related, as is an unidentified larval sparid from the eastern north Atlantic; spiny larval morphology is derived within the Sparidae and indicates that the currently recognized subfamilies are polyphyletic; Spondyliosoma is monophyletic; Calamus and Spondyliosoma are sister taxa