Steelhead Oncorhynchus mykiss that fail to emigrate seaward after release from hatcheries, commonly referred to as “residuals,” can have negative impacts on natural populations ranging from competition and predation to interbreeding with returning anadromous adults. We investigated how age at release, size, and maturation status influenced the rate of residual production in hatchery summer‐run steelhead released from the Winthrop National Fish Hatchery (Methow River, Washington) between 2010 and 2015. Migration data from 21,598 individuals implanted with PIT tags identified 1,783 residual steelhead expressing two distinct phenotypes: immature male and female parr; and precociously mature males. We found that age at release significantly affected the predominant residual phenotype. Age‐1 steelhead residuals (S1 rearing strategy) were dominated by smaller parr of both sexes (fish < 146 mm FL), while age‐2 residuals (S2 rearing strategy) were dominated by mature males, although both phenotypes were present in both S1 and S2 residual groups. Collections of residual steelhead in the Methow River indicated that parr phenotype residuals grew as well as natural‐origin juvenile O. mykiss, suggesting potential competition for food resources and habitat. Detections of PIT tags within the Methow River basin indicated that precocious male residuals may overlap both spatially and temporally with previously documented spawning anadromous adults, posing a potential genetic management risk. Both residual phenotypes had poor overwinter survival, and only 1 of the 1,783 residual fish eventually returned to the Methow River as an anadromous adult. We conclude that the ecological and genetic consequences of residual steelhead far outweigh their potential contribution to anadromous production, and measures should be taken to reduce their production by changing hatchery rearing practices.