Ongoing global warming is one of the major challenges for the development of aquaculture in the tropical regions where species are already cultured in the water temperature close to their upper physiological thresholds. Furthermore, warming can trigger blooms of toxic algae, yet we do not know how extreme warming such as a marine heatwave (MHW) and algal toxins may affect marine aquaculture species. To address this issue, we investigated the effects of a simulated MHW in combination with exposure to trans‐4‐trans‐decadienal (PUA), a diatom‐derived toxin, on survival, growth, development and biochemical composition of cobia larvae and juveniles. Cobia larvae were exposed for 48 hr to one of two temperatures (29 vs. 34°C) and two PUA treatments (0 vs. 0.5 µM). Surviving larvae from each treatment were divided into two subsets: three replicates were used for the feeding test and five replicates were used for the recovery test in a non‐contaminated environment at the respective temperatures of 29 or 34°C. Survival of cobia larvae was reduced by 16% in either MHW or PUA, but it dropped by 60% when both stressors were present, indicating a synergistic effect. MHW, but not PUA, reduced the feeding of cobia larvae. PUA had no delayed effects on growth rate and biochemical composition of the fish. MHW strongly reduced specific growth rate, body protein and lipid contents in cobia. Our results provide the first empirical evidence of how MHW and toxic algae may interact and challenge cobia and marine aquaculture production in tropical countries.