Penueus vannumei larvae (P2 through M3) and early postlarvae (<24 h old postlarva) were fed diets consisting of algae‐only, nematodes (Panugrellus redivivus) plus algae or Artemia plus algae. Growth (dry biomass gain) of second and third stage protozoea larvae fed the nematodealgae diet was significantly better than that of larvae fed the Artemia‐algae diet. From the first mysis through the postlarval substage (<24 h old), growth of shrimp fed the nematodealgae diet equalled that of larvae fed the Artemia‐algae diet. All larval substages fed nematodes plus algae accumulated significantly greater biomass than those fed a diet of only algae. Survival and percent metamorphosis of larvae fed nematodes plus algae did not differ significantly from that of larvae fed either Artemia plus algae or algae alone. A nematodealgae feeding regime, which potentially yields growth, survival and metamorphosis equal to that obtained on the standard Artemia plus algae regime, is proposed for P. vannamei.