Adding to the challenge of predicting fishery recruitment in a changing environment is downscaling predictions to capture locally divergent trends over a species’ range. In recent decades, the American lobster (Homarus americanus) fishery has shifted poleward along the northwest Atlantic coast, one of the most rapidly warming regions of the world's oceans. Building on evidence that early post‐settlement life stages predict future fishery recruitment, we describe enhancements to a forecasting model that predict landings using an annual larval settlement index from 62 fixed sites among 10 study areas from Rhode Island, USA to New Brunswick, Canada. The model is novel because it incorporates local bottom temperature and disease prevalence to scale spatial and temporal changes in growth and mortality. For nine of these areas, adding environmental predictors significantly improved model performance, capturing a landings surge in the eastern Gulf of Maine, and collapse in southern New England. On the strength of these analyses, we project landings within the next decade to decline to near historical levels in the Gulf of Maine and no recovery in the south. This approach is timely as downscaled ocean temperature projections enable decision makers to assess their options under future climate scenarios at finer spatial scales.