Understanding of density‐dependent effects is key to achieving sustainable management of self‐regulating biological resources such as fish stocks. Traditionally, density‐dependent effects on population abundance in fish have been considered to occur from hatching to recruitment, based on the paradigm of proportionality between spawning stock biomass and total egg production. Here, we demonstrate how the existence of intraspecific and interspecific density dependence in egg production changes the current understanding of density‐dependent processes in the life history of fish, by disentangling density‐dependent effects on egg production and survival from egg to recruitment, using sardine (Sardinops melanostictus, Clupeidae) and anchovy (Engraulis japonicus, Engraulidae) as model species. For sardine, strong intraspecific density‐dependent effects occurred in egg production, but no density‐dependent effects occurred or if any they were weak enough to be masked by environmental factors from hatching to recruitment. In contrast, for anchovy, interspecific density‐dependent effects occurred in egg production. In the survival after hatching, anchovy experienced stronger intraspecific density‐dependent effects than currently recognized. This analysis could overturn the current understanding of density‐dependent effects in the life history, highlighting contrasts between the effects on individual quality and population abundance and between the model species. We propose to reconsider the basis of fisheries management and recruitment studies based on the revised understanding of density‐dependent effects in the life history of the respective species.