Abstract Mortality, changes in blood osmolality, and pO2 in the goldlined seabream (Rhabdosargus sarba) on exposure to a subbloom concentration (2,000 cells/ml) of a toxic red tide alga, Chattonella marina, were investigated and related to quantitative ultrastructural alterations of the gill. The median lethal time (LT50) was 6 h. Significant induction of filamental chloride cells (CCs) (increases in CC density, apical opening area, fractional area, volume densities of CCs, and mitochondria within CCs), concomitant with a significant reduction in blood osmolality, was found within 3 h of exposure to C. marina. Further reduction in blood osmolality (67%) and a drastic decline of pO2 (70%) were detected in moribund fish after 6 h. Fish were also subjected to severe salinity stress (abrupt transfer to 0 and 60‰ salinities), and the same parameters were measured. Our quantitative ultrastructural and physiological data suggest that fish exposed for 6 h to C. marina (2,000 cells/ml) suffered similar but more severe osmotic distress as compared to that induced by abrupt transfer to 60‰ persaline water. Results of the salinity stress experiment also showed that suffocation was not a secondary response induced by osmotic impairment in the moribund fish. Osmoregulatory failure in conjunction with suffocation may be the cause of death following exposure to C. marina. The findings of this study provide evidence that C. marina, even in concentrations below visible blooms, can pose a significant threat to marine fish.