Red coloration is considered an economically important trait in some fish species, including spotted scat, a marine aquaculture fish. Erythrophores are gradually covered by melanophores from the embryonic stage. Despite studies of black spot formation and melanophore coloration in the species, little is known about erythrophore development, which is responsible for red coloration. 1-phenyl 2-thiourea (PTU) is a tyrosinase inhibitor commonly used to inhibit melanogenesis and contribute to the visualization of embryonic development. In this study, spotted scat embryos were treated with 0.003% PTU from 0 to 72 h post fertilization (hpf) to inhibit melanin. Erythrophores were clearly observed during the embryonic stage from 14 to 72 hpf, showing an initial increase (14 to 36 hpf), followed by a gradual decrease (36 to 72 hpf). The number and size of erythrophores at 36 hpf were larger than those at 24 and 72 hpf. At 36 hpf, LC–MS and absorbance spectrophotometry revealed that the carotenoid content was eight times higher than the pteridine content, and β-carotene and lutein were the main pigments related to red coloration in spotted scat larvae. Compared with their expression in the normal hatching group, rlbp1b, rbp1.1, and rpe65a related to retinol metabolism and soat2 and apoa1 related to steroid hormone biosynthesis and steroid biosynthesis were significantly up-regulated in the PTU group, and rh2 associated with phototransduction was significantly down-regulated. By qRT-PCR, the expression levels of genes involved in carotenoid metabolism (scarb1, plin6, plin2, apoda, bco1, and rep65a), pteridine synthesis (gch2), and chromatophore differentiation (slc2a15b and csf1ra) were significantly higher at 36 hpf than at 24 hpf and 72 hpf, except for bco1. These gene expression profiles were consistent with the developmental changes of erythrophores. These findings provide insights into pigment cell differentiation and gene function in the regulation of red coloration and contribute to selective breeding programs for ornamental aquatic animals.