Prionospio patagonica inhabits temporary silty tubes intertidally and shallow subtidally in brackish water estuarine environments in southern Chile. The species is gonochoristic with the female:male ratio being close to 2:1. Females and males release gametes into water. Pelagic planktotrophic larvae were caught in the plankton in the River Valdivia estuary in October–November and in March. Development of the adult morphology is described and illustrated beginning from the 2-chaetiger larval stage. One pair of lateral eyes first appears in the early larva, and shortly after that the right median eye develops. The left median eye appears after settlement, in juveniles with 10–11 segments. Developed 6-segment larvae have three dark red eyes, short palps of equal length, no nototrochs, one pair of small cells with grasping cilia on the pygidium, a small ciliated pit, gastrotrochs on segments 2–6, long serrated bristles in notopodia, adult capillaries in noto- and neuropodia on segments 2–5, single hooks in both rami on segment 6, and one pair of provisional papillae on the pygidium. A ventral buccal bulb is present below the short oesophagus and two pairs of provisional protonephridia are present in segments 1 and 2. The wall of the anterior part of the midgut has a characteristic brown pigment. The 6-segment larvae, about 400 μm long, settle and undergo gradual metamorphosis. In adults, hooks are gradually lost from noto- and neuropodia but sabre chaetae appear from segment 7 and retain their anterior position as growth proceeds. Up to 14 pairs of cirriform branchiae develop from segment 2, and three adult cirri appear on the pygidium. The afferent and efferent arms of each branchial blood loop are interconnected by capillary loops. A greenish heart body is present in the main dorsal blood vessel in anterior segments. Up to 21 pairs of metanephridia develop in anterior sterile segments, beginning with segment 4. Transparent gonoducts are present in fertile segments.