Cobia (Rachycentron canadum) is one of potential candidate species for marine cage culture due to its fast growth and higher resistance to disease. Brood stock cultured in land-based pond in southern Taiwan spawns year round with a peak in spring and autumn. Spawning in the rainy and typhoon seasons results in a difficulty of larval rearing. This study aimed to investigate the effect of environmental factors on the embryonic development and early larval rearing of cobia. Salinity tolerance at early and late embryos stages and yolk-sac larvae determined the hatching rate and survival rate, respectively. Embryos and yolk-sac larvae were transferred from salinity 30 psu into different salinities (5, 10, 15, 20, 25, 30, 35, 40 and 45 psu). Different bottom substrates (soil, sand and no substrate) were evaluated in the development of yolk-sac larva. Finally, the effect of salinity (10, 15, 20 and 30 psu) on larval rearing was tested. The results showed that both early and late embryonic stages had better hatching rate at salinity of 25, 30 and 35 psu and the late stage of embryos was more tolerant to the changes of salinity. The highest larval survival rate was at salinity 25 psu. The late stage of yolk-sac larvae (2 dph) was more tolerant to the changes of salinity than the early stage (2-4 hph) of yolk-sac larvae. Survival rate on the larval rearing was significantly different (P<0.05) at salinity of 20 and 30 psu with 11.6 and 15.6%, respectively. The survival rates of yolk-sac larva cultured in different bottom substrates were 72.5% (no substrate), 57.5% (sand) and 13.5% (soil). In conclusion, the environment of no bottom substrate and salinity between 25 to 35 psu was good for the development of yolk-sac larva stages and cobia embryo. Larvae may have better survival and growth rates by culturing them in seawater of salinity 20-30 psu.