Arachidonic acid (ARA, 20:4n− 6) is essential for oysters and has been implicated in reproduction and immune response of different mollusk species, probably by modulating the levels of prostaglandins. We tested the effect of dietary ARA on reproduction, PGE2 levels, and some immune variables in Crassostrea corteziensis. Oysters were fed Isochrysis affinis galbana, clone Tahiti (T-iso) for three weeks, which has low ARA and high DHA (22:6n− 3) levels and that was supplemented with 0, 1 and 9% ARA-rich lipid emulsions at 10% of algal dry weight biomass using a once-daily batch system to supply the microalgae. Survival and growth were not affected by the ARA enrichment. More gonadic tissue was found in oysters fed 1% ARA but oysters fed the 9% ARA were in a more advanced stage of maturation. ARA-enrichment did not affect fatty acid concentration in membrane phospholipids, but ARA concentration was higher in triacylglycerols of oysters fed 9% ARA compared to 0% ARA diet. PGE2 and/or PGF1α concentration was higher in oysters fed the 9% ARA diet. Total hemocyte count was not affected by ARA enrichment, but the proportion of granulocytes and the superoxide anion activity (SOA) in relation to total hemocyte count were higher in oysters fed the 1% ARA diet. These results suggest that feeding moderate levels of ARA to oysters can boost immune system response and oocyte production. However, high levels of ARA favor final maturation and advanced stages of vitellogenesis but possibly at the expense of immune response.