Swordtip squid, Uroteuthis (Photololigo) edulis was caught from waters off the northern coast of Taiwan. Spontaneous spawning occurred in the tank. The egg capsules were collected and transferred to laboratory and were incubated in a flask with aeration. About 50 minutes after egg laid embryonic development was started and recorded at regular intervals. One capsule was removed from the cluster and maintained in a Petri dish. The capsule is soft, milky color and cylinder in shape. Eggs are one by one in line arranged spirally clock-wise from base to distal, and each capsule usually contains 33 to 285 eggs. The number of eggs increased with the size of capsule. The egg is normally ovoid, but abnormal ones are in pear shape. Duration of hatching ranged from 218 to 242 hours at the water temperature between 25.1 and 26.4 ℃ and in salinity 32.5 psu. The size of the hatchlings were 3.00 to 3.45 mm in mantle length. Absorption of the external yolk sac was finished just after hatching. Hatchlings were aggregating on the surface with positive phototaxis. They swam agilely with capability of inking. Based on the observation, reproduction of the swordtip squid has evolved more advance and effectively. This feature can be applied to squid resource preservation.