Sexual reproduction of the soft coral Xenia macrospiculata Gohar, 1940 was studied for a four year period at the Gulf of Eilat (Red Sea). Ripe eggs detach successively from the mesenteries into the polyp cavities, where fertilization probably occurs. Subsequently, they pass to special brooding pouches situated near the anthocodial bases. Embryogenesis takes place in these endodermal chambers and after maturation planulae are shed via temporary openings found among the polyps. The planulation period lasts for 4-5 months (May-September) every year. Larval expulsion occurs at night in bi-weekly cycles during interlunar phases: near the first and the last moon quarters. Colony fecundity depends on its size: large colonies are estimated to produce several hundred larvae per polyp each year. Although little information exists on other planulating octocorals, the study indicates that X. macrospiculata exhibits a remarkably high reproductive potential, which contributes to its dominance in the Red Sea coral reefs. Planulae of X. macrospiculata share common morphological features with other octocorals. The only movement exhibited by them is slow crawling over the substrate. They possess a very short planktonic phase and metamorphose into polyps immediately after settlement. These traits enable efficient colonization of available reef surfaces and hence, development of dense populations.