Hatchery-reared aquatic organisms usually have morphological and physiological differences compared to their wild conspecifics, which may have negative consequences the production of the juveniles under hatchery rearing conditions. To optimize the artificial breeding technologies of Sepiella japonica, we compared the morphology, biochemical composition and embryonic development between wild and hatchery-reared S. japonica. Furthermore, we also explored the effect of light cycle and capsule layer peeling on the embryonic development of S. japonica. The results showed that there were significant differences in morphological characteristics and biochemical components between wild and hatchery-reared S. japonica. The body sizes at maturity were much bigger in wild S. japonica than their hatchery-reared conspecifics. The lipid contents in muscle and liver of wild S. japonica were significantly lower than those of hatchery-reared. The protein contents in the ovary of wild S. japonica were significantly higher than those of hatchery-reared. The hatching rate of the black eggs spawned by the hatchery-reared cuttlefish was the highest when eggs were exposed to a 12∶12-hours light∶dark cycle. The hatching rate of the white eggs spawned by the hatchery-reared cuttlefish was the highest when eggs were exposed to the 24 hours dark cycle and 24 hours light cycle. The hatching rate of the black eggs spawned by the wild cuttlefish was the highest when eggs were exposed to the 24 hours dark cycle and 12∶12-hours light∶dark cycle. With the increasing light duration, the hatching period of fertilized eggs showed a tendency that it first increased and then decreased, which indicated that light cycle was an important factor for the development of embryo. With egg capsule layer peeling, the fertilized eggs from hatchery-reared S. japonica showed a significant decreased hatching rate, and the hatching time showed a decreasing tendency. To improve the hatching rate of the fertilized eggs and the survival rate of hatchlings, it is important to add sufficient number of wild brood-stock into productive group during artificial breeding and seedling production programs. Moreover, low light intensity should be implemented during the incubation of the fertilized eggs, which may improve the hatching rate and the survival rate of hatchlings. This study could provide useful information for the optimization of artificial breeding technology of S. japonica.