Concerns have long been raised about the welfare of ballan wrasse (Labrus bergylta) used for the biological control of sea lice in Atlantic salmon (Salmo salar) aquaculture. This study assessed the effect of increased dietary eicosapentaenoic acid (EPA) levels and initial condition factor (CF) on the subsequent performance and welfare of ballan wrasse farmed in high and low water temperatures. Fish were fed a diet with either commercial or high EPA levels for 3 months at 15°C. Subsequently, fish were tagged with a passive integrated transponder, measured for their CF and divided into two groups consisting of fish from both treatments and reared for 4.5 months at either 15 or 6°C fed a commercial diet. Each fish was categorized as high (≥2.7) or low CF (<2.7) fish based on the calculated average CF of the population. Dietary composition influenced the fatty acid (FA) profile of the stored lipids without affecting the growth or welfare of ballan wrasse. Fish reared at 15°C showed higher growth, more fat and energy reserves and less ash content. Fish reared at 6°C lost weight, using up their body lipids at the end of the temperature trial. Gene expression analyses showed upregulation of the positive growth marker (GHrα) and two genes involved in the synthesis and oxidation of FAs (elovl5, cpt1) and downregulation of the negative growth marker (mstn) in fish reared at 15°C compared to those reared at 6°C. Fish reared at 6°C showed upregulated levels of il‐6 compared to those reared at 15°C, suggesting an enhanced immune reaction in response to low temperature. Fish with high CF showed better survival, growth and performance compared to those with low CF. External welfare scoring showed higher prevalence and severity in emaciation, scale loss and the sum index score (of all measured welfare parameters) in fish reared at 6°C compared to those reared at 15°C and better welfare in fish with high CF compared to those with low CF. Histological examination of the skin showed that fish reared at 6°C had decreased epidermal thickness, a lower overall number of mucous cells in the inner and outer epidermis and a different organization of mucous cells compared to fish reared at 15°C, indicating stress in fish reared at 6°C. Overall, low water temperatures had profound effects on the performance and external and internal welfare parameters of ballan wrasse and can be considered a stressor likely affecting the delousing efficacy. These findings support the seasonal use of different cleaner fish species. High CF, but not increased dietary EPA levels, appeared to help fish cope better with low water temperatures and should thus be assessed and considered before deploying them in salmon cages.