Red drum settle into shallow seagrass meadows during the larval stage. Day-night cycles in these habitats result in marked diel temperature and dissolved oxygen (DO) cycles, and it is possible that extreme fluctuations influence endocrine development and growth of larvae. Here, we described red drum interrenal and thyroid ontogeny and determine responses to environmental stimuli with special emphasis on settlement to explore possible role of hormones as mediator of directive environmental factors. This study detected an early activation of thyroid and interrenal axis during the yolk-sac phase and a second activation of the thyroid starting at settlement size to the end of the larval period. Whole-body l-thyroxine (T4) and 3-5-3'-triiodo-l-thyronine (T3) showed a sharp decline at the juvenile stage. In contrast, cortisol steadily declines during the larval phase to a minimum before the end of the larval period. Older settlement-size larvae exposed to a strong stimulus increased whole body cortisol. In contrast, new settlers showed a minor cortisol rise suggesting changes on stress responsiveness during the ontogeny of the species. Additionally, settlement-size larvae exposed to various environmentally realistic temperature or DO fluctuations showed no difference in growth compared to fish grown under stable conditions (control). However, growth rate was significantly reduced in DO cycled fish with prolonged exposure to hypoxia. No differences were found in whole-body cortisol levels in the reduced growth treatment groups, suggesting that growth retardation was not related to a cortisol-mediated stress response. In moderate DO and temperature treatment groups, cortisol showed wider fluctuations than control groups during the night time that were not related to stress.