C-type allatostatins are a family of peptides that characterized by a conserved unblocked-PISCF in C-terminal. In insects, it is well known that C-type allatostatin has a potent inhibitory effect on juvenile hormone biosynthesis by the corpora allata. Recently, C-type allatostatin has been widely identified from crustacean species but little is known about its roles. Therefore, this study described the tissue distribution patterns of C-type allatostatin and its putative receptor in the mud crab Scylla paramamosain, and further explored its potential effect on vitellogenesis. Firstly, the cDNAs encoding C-type allatostatin (Sp-AST-C) precursor and its putative receptor (Sp-AST-CR) were isolated, respectively. Subsequently, RT-PCR results suggested that, Sp-AST-C was mainly expressed in the nervous tissue, middle gut and the heart while Sp-AST-CR had an extensive expression in the detected tissues except the eyestalk ganglion and hepatopancreas. Furthermore, the Sp-AST-C expressing cells in the cerebral ganglion were detected through in situ hybridization, it showed that Sp-AST-C was localized in cluster 6, 8 of protocerebrum, cluster 9, 10, 11 of deutocerebrum, and cluster 14, 15 of tritocerebrum. The whole-mount immunofluorescence gave a similar distribution pattern. An in vitro experiment showed that, the synthetic Sp-AST-C had no effect on the abundance of Sp-Vg in the hepatopancreas and ovary but significantly reduced the expression of Sp-VgR in the ovary in a dose-dependent manner. Furthermore, it was demonstrated that the Sp-VgR expression, Vn content, and oocyte diameter in ovary were reduced after 16-days injection of Sp-AST-C. Finally, the transcripts of Sp-AST-CR were specifically localized in the oocytes of ovary by in situ hybridization, which further revealed that the oocytes were target cells for Sp-AST-C. In conclusion, our results suggested that Sp-AST-C signaling system was involved in the regulation of ovarian development, in which Sp-AST-C might inhibit the uptake of yolk by oocytes directly and obstruct oocyte growth.