The underlying mechanism of sex differentiation and development remains mysterious concerning the economic crustaceans, hindering the development of mono-sex breeding technology of those species. Gene discovery by next generation sequencing (NGS) has been widely applied in those species without reference genome. Nevertheless, the pivotal molecular differences driving sex dimorphisms before gonad differentiation are largely unknown. Besides, accurate assembly and downstream analysis remain a challenge due to the short-read nature of NGS. Here, we reported a comprehensive long read transcriptome by single-molecule real-time (SMRT) sequencing in an economic crustacean species, mud crab (Scylla paramamosain). Combined with NGS, differentially expressed genes (DEGs) were further analyzed and validated between sexes with different gonadal differentiation status. It was demonstrated that the quality of the long-read transcriptome (N50 of unigenes, annotation rate, species-hit accuracy, etc.) was significantly higher than previously assembled transcriptomes. Furthermore, it was founded that narrow transcriptomic differences existed between sexes before gonad differentiation in the mud crab. Estradiol 17-beta-dehydrogenase 8 (17β-HSD8) gene involved in steroid biosynthesis was significantly up-regulated in genetic male juvenile crab, suggesting estradiol-17β (E2) may promote female differentiation in the mud crab. Moreover, novel enriched pathways including Hippo signaling pathway were firstly identified to be involved in gonadal development in crustaceans. Our data will not only provide valuable genetic resource for further diverse genetic research, but also help to understand the mechanism underlying sex differentiation and gonadal development of this species. •DEGs analysis combining long read transcriptome and next generation sequencing was reported in crustaceans firstly;•Novel DEGs between sexes at first crablet stage (C1) before gonadal differentiation were identified in the mud crab;•17β-HSD8 was expressed with sexual difference at C1 stage, suggesting E2 may promote female differentiation in mud crab;•KEGG pathway enrichment and FISH analysis revealed that Hippo pathway may play important role in gonadal development.