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The parasitic dinoflagellate Hematodinium perezi infects the American blue crab Callinectes sapidus and other decapods along the Eastern seaboard and Gulf of Mexico coast of the USA. Large juvenile and adult blue crabs experience high mortality during seasonal outbreaks of H. perezi, but less is known about its presence in the early life history stages of this host. We determined the prevalence of H. perezi in megalopae and early benthic juvenile crabs from multiple locations along the Virginia portion of the Delmarva Peninsula. The DNA of H. perezi was not detected in any megalopae collected from several locations within the oceanic coastal bay complex in which H. perezi is found at high prevalence levels. However, prevalence levels were high in early benthic juveniles from 2 oceanic coastal embayments: South Bay and Cobb Bay. Prevalence levels were lower at locations within Chesapeake Bay, including Cherrystone Creek, Hungars Creek, and Pungoteague Creek. Sampling over different seasons and several consecutive years indicates that disease transmission occurs rapidly after megalopae settle in high-salinity bays along the Delmarva Peninsula during the late summer and fall. Infected juvenile crabs can overwinter with the parasite and, when subjected to increasing water temperatures in spring, infections progress rapidly, culminating in transmission to other crabs in late spring and early summer. In high-salinity embayments, H. perezi can reach high prevalence levels and may significantly affect recruitment of juvenile blue crabs into the adult fishery.