The presence of a characteristic crustacean larval type, the nauplius, in many crustacean taxa has often been considered one of the few uniting characters of the Crustacea. Within Malacostraca, the largest crustacean group, nauplii are only present in two taxa, Euphauciacea (krill) and Decapoda Dendrobranchiata. The presence of nauplii in these two taxa has traditionally been considered a retained primitive characteristic, but free-living nauplii have also been suggested to have reappeared a couple of times from direct developing ancestors during malacostracan evolution. Based on a re-study of Thysanoessa raschii (Euphausiacea) using preserved material collected in Greenland, we readdress this important controversy in crustacean evolution, and, in the process, redescribe the naupliar and metanaupliar development of T. raschii. In contrast to most previous studies of euphausiid development, we recognize three (not two) naupliar (= ortho-naupliar) stages (N1-N3) followed by a metanauplius (MN). While there are many morphological changes between nauplius 1 and 2 (e.g., appearance of long caudal setae), the changes between nauplius 2 and 3 are few but distinct. They involve the size of some caudal spines (largest in N3) and the setation of the antennal endopod (an extra seta in N3). A wider comparison between free-living nauplii of both Malacostraca and non-Malacostraca revealed similarities between nauplii in many taxa both at the general level (e.g., the gradual development and number of appendages) and at the more detailed level (e.g., unclear segmentation of naupliar appendages, caudal setation, presence of frontal filaments). We recognize these similarities as homologies and therefore suggest that free-living nauplii were part of the ancestral malacostracan type of development. The derived morphology (e.g., lack of feeding structures, no fully formed gut, high content of yolk) of both euphausiid and dendrobranchiate nauplii is evidently related to their non-feeding (lecithotrophic) status.