A bottleneck in restoring self-sustaining beds of the European oyster (Ostrea edulis) is the successful development and settlement of larvae to bottom habitats. These processes are largely governed by temperature but a mechanistic understanding of larval performance across ecologically relevant temperatures is lacking. We reared larvae at low (20–21 °C) and high (20–24 °C) fluctuating temperatures and applied short-term exposures of larvae to temperatures between 16 and 33 °C to assess vital rates and thermal coping ranges. Larval thermal preference was between 25 and 30 °C for both rearing treatments which corresponded with optimum temperatures for oxygen consumption rates and locomotion. Larvae had 5.5-fold higher settling success, however, when reared at the high compared to the low fluctuating temperatures. Higher mean and periods of increased temperature, as projected in a future climate, may therefore enhance recruitment success of O. edulis in northern European habitats.