The conflicts between grey seals and the cod fisheries in the Swedish Baltic Sea have increased steadily during the past 10 years. In this study we investigated damage to catches caused by seals in the inshore gillnet fishery for cod in the central Baltic Sea. Damage by seals includes both visible catch losses such as fish remains found and hidden losses where fish are removed entirely without leaving any visible fish remains in the net.An observer joined two professional fishermen in two locations, recording the fishing effort and catches on their daily fishing trips for a period of three months each year in 2005 and 2006. To estimate the hidden losses, marked fish were manually entangled in the nets before resetting. When hauling the nets, the number of marked fish either damaged or lost was used to calculate the "hidden" losses.A total of 324 fleets of nets were set and on 169 of these settings, damaged fish were found in the nets when hauled. 59 previously set fleets were selected for experimental trials in which fish were marked and replaced in the nets in order to estimate the extent of the hidden losses, and 39 of these set fleets were found to have been visited by seals. The mean hidden losses were calculated to be 44.2% of the marked fish (95% C.I 33.9-54.5) after allowing for fish lost due to handling of the nets. On average 4.1 fish were lost for each fish found damaged (max. 25.6 and min. 1.6) in 2005 and in 2006 the ratio was 2.7 (max. 11.3 and min. 1.4). Extrapolating these numbers to the actual catches landed in the fishery observed, the hidden losses would correspond to 36% of the total potential catches or 67% of the landed catches in 2005, and to 15% of the total potential catches or 19% of the landed catches in 2006.The results from the present study show that the damage caused by grey seals such as in hidden as well as visible catch losses are significant and that this needs to be taken into account when estimating the total impact of seal predation on fisheries.