A study comprised of two trials determined the effects of water turbidity produced by live microalgae and inert clay particles on the larval rearing of grey mullet (Mugil cephalus). Trial 1 evaluated the effect of microalgae produced water turbidity on grey mullet larval performance and digestive tract (DT) enzyme ontogeny. Two microalgae (Nannochloropsis oculata and Isochrysis galbana) water turbidity levels (0.76 and 1.20 NTU, respectively) and a non-microalgae control (0.26 NTU) were investigated on 2 to 23 dph grey mullet larvae. The higher turbidity (1.2 NTU) larvae (5 dph) consumed markedly (P < .05) more rotifers than other treatment fish, independently of the microalgae type. There was no clear effect of the turbidity treatments on DT enzyme ontogeny. However, in all treatments lipase and alkaline proteases appeared to be modulated by the diet. Alkaline phosphatase activity was ca. 8 times higher and α-amylase activity increased 5.3 times in 79 dph fish compared to 40 dph individuals. The ratio of alkaline phosphatase and leucine-alanine aminopeptidase indicated gut maturation occurred around 61 dph. Trial 2 compared the most effective N.occulata produced turbidity level (1.2 NTU) with the identical water turbidity produced by inert clay on larval performance. M. cephalus larvae exposed to high algal turbidity demonstrated superior performance (P < .05), in terms of rotifer ingestion, dry weight gain and survival, compared to cohorts reared under the clay treatment and the lower microalgae produced turbidity. These findings suggested that water algal turbidity is not the dominant factor determining improved grey mullet larval performance.