For benthic marine invertebrates that deposit offspring inside protective capsules or gelatinous egg masses, small-scale variation in environmental parameters can affect offspring mortality, performance, timing of hatching and dispersal potential. Plasticity in hatching and dispersal potential have received less attention than egg mass mortality and juvenile performance, but there may be adaptive responses that balance the costs and benefits of benthic and pelagic development in specific contexts, such as escaping poor environments. Some species, such as the bubble snail Haminoea japonica, produce two offspring phenotypes at hatching that differ in dispersal potential. Here, I investigated whether the substrata that egg masses develop on can influence whether offspring tended to hatch as either phenotype. In the field, egg masses were more commonly deposited in association with filamentous algae and in laboratory experiments, free-swimming larvae settled and metamorphosed more readily on algae. When egg masses developed on the algae that induced settlement, there were more crawl-away juveniles than free-swimming larvae. Such a response has important consequences for dispersal potential, hence the deposition substratum may have an adaptive value because crawl-away juveniles can avoid a potentially risky planktonic period when settlement substratum is present, but larvae can disperse when a suitable settlement substratum is absent.