<p>The global spread of the shell-boring polychaete <i>Polydora websteri</i> poses economic and ecological risks to commercially important mollusks. To assess its establishment potential in various regions, understanding the biological characteristics of <i>P. websteri</i> in its natural environment is crucial. This study aimed to unravel reproduction, larval development, and population dynamics of <i>P. websteri</i> inhabiting the shells of wild oyster (<i>Crassostrea gigas</i>) from Gamo Lagoon, northeastern Japan. Up to 142 worms were found within a single oyster shell, and many mud blisters were observed on the inner surfaces of the oyster shells. Females spawned egg capsules from May to October when water temperature exceeded 15&#xa0;°C. Larval development of <i>P. websteri</i> exhibits poecilogony, producing both adelphophagic and planktotrophic larvae within the same egg capsules. Population dynamics revealed that both larval types contributed to the observed pattern of recruitment. The recruitment peak (August–October) results from the settlement of adelphophagic larvae with short pelagic periods. New recruitment was continuously observed after spawning seasons (November–April). This was suggested to be due to the later settlement of planktotrophic larvae, which have a long pelagic period and the potential to disperse to other habitats. By utilizing the advantages of both local retention and dispersal strategies, <i>P. websteri</i> is likely to maintain its population in the unstable environment of Gamo Lagoon. This adaptive strategy may contribute to the successful establishment of <i>P. websteri</i> in newly introduced areas, facilitating its outbreak as a global aquaculture pest.</p>