In Cassiopea xamachana the medusae are dioecious. It is assumed that the eggs in the female are fertilized by sperm released from nearby males. The fertilized eggs are moved to knob-shaped tentacles near the center of the female where they develop into larvae. Once able to undergo metamorphosis, the larvae hatch as planulae which permanently attach to surrounding substrate with a microbial film and metamorphose into a polyp with tentacles (scyphistoma). These scyphistomae can undergo asexual reproduction via budding when food is plentiful. Each new bud will settle and form a new scyphistoma. Once the scyphistomae acquire a certain species of Symbiodinium and when temperatures reach or exceed 20ºC they will begin to strobilate. C. xamachana undergo monodisc type strobilation. Although medusae are always found containing zooxanthellae, they do not pass this onto their larvae. Each scyphistoma must acquire its own zooxanthellae from the surrounding seawater through absorption or in conjunction with feeding, to complete its life cycle. 
As noted above, C. xamachana undergo strobilation during the summer and early fall, and that their medusae are seen all year round. This is a unique trait for this species as other temperate-zone species of scyphozoans undergo strobilation during the winter and their medusae disappear during this time. It appears that the tropical C. xamachana has “cold-sensitive scyphistomae and more temperature-tolerant medusae”. 
It has also been observed that the plaulae of C. xamachana are rather selective about where they settle. If present, the planulae will settle on submerged, degrading leaves of the Red Mangrove Rhizophora mangle. This is often the case when the C. xamachanaare living in ponds surrounded by mangroves or mangrove swamps. They are even as selective as to prefer the shady side of the leaves. But most interesting is perhaps the natural, chemical cues received by the  larvae to both settle and metamorphose on the leaves .