Spawner-isolated mortality virus (SMV) has been associated with mortalities in broodstock of Penaeus monodon and with mid-crop mortality syndrome on grow-out farms. Epidemiological evidence suggested an association between the SMV status of broodstock and subsequent survival of their progeny, and this paper describes investigations into that association. The faeces of 909 broodstock in 9 different groups were tested by a polymerase chain reaction (PCR) for SMV and positive results were confirmed by an internal dot-blot. Seventy-seven spawners (8.5%) were positive for SMV with prevalence ranging from 0 to 24% among groups. The prevalence in spawners of P. monodon was higher (24%) than in P. merguiensis (4%). Three longitudinal studies were undertaken to compare the survival of progeny from broodstock that were positive to SMV with those that were not. Survival in hatchery tanks of progeny from SMV-positive spawners was lower than those from SMV-negative spawners with reductions of 23% (p = 0.01), 7.3% (p = 0.214) and 18.9% (p = 0.129) in the 3 studies. The conclusions were less consistent when examined during each of the later stages of growth in hatchery pools, nursery and grow-out ponds, with progeny from SMV-postive spawners sometimes having better survival rates. However, survival was better overall in progeny from SMV-negative spawners. Simple linear regression showed survival was negatively related to the proportion of postlarvae from SMV-positive spawners, with a decrease in survival of 5.6% for each 10% increase in the proportion of postlarvae coming from SMV-positive spawners (p = 0.006). Data from 38 ponds showed 6.71% of losses were due to SMV. If these losses were consistent across the entire industry, the annual loss due to SMV would have been approximately AUD 3 million in 1999/2000.