Timing of spawning and site selection in fish are important fitness-related traits that ultimately influence reproductive success. Capelin (<named-content content-type="species" xlink:type="simple">Mallotus villosus</named-content> (Müller, 1776)), a key forage fish in the north Atlantic, spawn eggs that adhere to sediments on beaches and in demersal (deep-water) habitats throughout their geographic range, resulting in divergent thermal regimes for the incubating eggs. We compare the timing and duration of spawning of capelin and its influence on the developmental and survival rates of eggs between a beach and a demersal spawning site on the northeast Newfoundland coast in 2004 and 2005. Spawning events at the beach were at least 10 days earlier and shorter (2-3 days) relative to the demersal site (8-12 days). Hourly and mean daily incubation temperatures at the beach were higher and more variable relative to the demersal site, resulting in two distinct developmental strategies: low to high mortality and rapid development (beach) versus low mortality and slow development (demersal). Higher egg mortality at beach sites was explained by higher and more variable temperatures and potentially limited oxygen replenishment relative to demersal sites. The divergent biology of beach and demersally spawned eggs suggest that each will respond differently to environmental change and, thus, require different approaches for successful management.