To understand and predict the dynamics of a population it is necessary to determine whether processes such as dispersal, growth and mortality are density-dependent and how these processes may influence patterns of abundance and distribution. Newly hatched individuals (neonates) are a common dispersal stage in many terrestrial and marine invertebrates, and may affect where, and in what abundance, older stages are subsequently found, hence underscoring the potential importance of supply-side processes in governing the ecology of those systems. In streams, benthic invertebrates might be expected to experience strong density-dependent competition near oviposition sites due to the often clumped distribution of eggs, yet the ecology of the early life-history stages has been poorly studied. In laboratory experiments, we examined whether newly hatched black ny larvae (Simulium vittatum) disperse from egg masses, via water currents, in a density-dependent fashion, and the likelihood that the strength of density-dependence is modulated by current speed. To understand better the mechanisms controlling neonatal dispersal, we also determined the amount of time an average larva spent fighting, and the relationship between fights and dispersal events. The experimental results demonstrate that the dispersal rate of neonates from egg masses was strongly density-dependent. A second-order polynomial regression model reflecting this density effect explained 91% and 75% of the variation in dispersal rates for the fast and slow current speed treatment, respectively. Dispersal was lower at fast than at slow current speeds, indicating that these patterns of drift are not the result of passive dislodgment by water currents. Current speed also modified the effect of density on dispersal rate. The increase in dispersal with a unit change in density was lower at fast than at slow current speeds. Increasing larval density and low current speed increased the proportion of time a larva spent fighting, but most larvae did not disperse immediately after being attacked. The density effect suggests that dispersal by black fly neonates can be a voluntary response to reduced feeding rates stemming from competition with neighboring larvae. In general, it appears that the tendency of neonates to remain at the oviposition site depends on the suitability of the microhabitat for feeding. The high dispersal rates we documented (up to 4.5% of individuals min(-1)) occurred in response to levels of larval density, current speed, and food concentration that are probably typical of many field settings. This implies that many neonates may also disperse in a density-dependent manner via water currents in the field. The distances traveled by large numbers of dispersing neonates may decouple the number of larvae in an area from the number of adults that oviposited there, which suggests that supply-side phenomena may be important in streams. The development of a clearer understanding of the role of density-dependent dispersal as a potential regulatory factor in black fly populations depends upon the assessment of the fate of drifting individuals, coupled with measurement of other sources of mortality in these populations.