In Daphnia magna, high animal density causes a mutual intraspecific influence, called life-strategy shift by intraspecific interaction (LiSSII). We investigated mothers (F0), living singly or in groups of four per 50 ml, and their F1 offspring. Clutch sizes of F0 daphnids living in groups were smaller than those of singly living ones. However, the F1 neonates were bigger in size, had higher dry weights and contained more lipids. They were also able to survive longer starvation periods. If these F1␣daphnids were again kept in groups of four, the effects of LiSSII on some life-history parameters were stronger. As compared to group-living F0 daphnids, juvenile development time was prolonged from 7.5 to 10.0 days. In contrast, body size was reduced and the further reduction in offspring number was slight. The F2␣neonates exhibited the same change towards bigger size and higher dry weight as observed in the F1. In contrast F1 daphnids, that were the offspring of daphnids living in groups but were kept singly were bigger and produced more offspring than single daphnids that were the offspring of daphnids kept singly. The neonates of the former were bigger in size and heavier. It is suggested that for the F0 generation the ecological significance of the LiSSII effects is an increase in both the parent and offspring survival probability when food is limited. LiSSII acts before food conditions deteriorate seriously. Daphnids affected by LiSSII invest less of their biomass into offspring. Offspring release is well-timed and quality is better, at the expense of quantity. Under favourable environmental conditions, F2 daphnids that are the offspring of mothers affected by LiSSII appeared well adapted to fast recolonisation when living at low density.