Physiological state (molt stage) of planktonic and benthic blue crab (Callinectes sapidus) postlarvae (megalopae) was quantified within and outside Chesapeake Bay at various spatial scales. Physiological state of planktonic megalopae advanced significantly from the continental shelf off the Chesapeake Bay mouth, through the bay mainstem, and into upriver stations in the York River, a tributary of Chesapeake Bay. These results imply that settlement and metamorphosis of blue crab megalopae is dependent on location relative to the shelf. The physiological evidence supports the export-reinvasion theory of blue crab recruitment and is inconsistent with a larval retent~on hypothesis. In the tributary, benth~c megalopae were significantly more advanced in molt stage state than planktonic rnegalopae. Temporal variation in molt stage was observed over days and months. In addition, time to metamorphosis was significantly and positively correlated with molt stage. Advancement in physiological state of megalopae during reinvasion of the estuary may serve as an indicator of likelihood of settlement.