Descriptions and illustrations of stages in the larval development of two common sympatric freshwater fishes in streams of tropical north-east Queensland, the fly-specked hardyhead Craterocephalus stercusmuscarum stercusmuscarum and the purple-spotted gudgeon Mogurnda adspersa are presented. Larval development is described in terms of ontogenetic changes in gross morphology, notochord morphology, pigmentation, finfold morphology and fin structure. Developmental changes during the larval period of C. s. stercusmusearum are similar to other atheriniformes, especially the genus Melanotaenia. The highly variable development and advanced state at hatching of M. adspersa in tropical streams contrasts with larval development of disjunct populations of the same species in southern Australia and also with other closely related species of the Eleotridae described elsewhere. Larvae of M. adspersa can be distinguished from C. s. stercusmuscarum on the basis of six key characters: pigmentation, presence of a pre-anal ventral finfold, general body form and shape, number of post-anal myomeres, notochord morphology at hatching and timing of swimbladder inflation. Characters that allow for the accurate discrimination between both of these species and other sympatric atheriniformes are identified. (c) 2005 The Fisheries Society of the British Isles.