Survival rate, frequency of malformed embryos, and antioxidant defense system responses in the benthic amphipod Gmelinoides fasciatus from the Baltic Sea were measured to examine the effects of toxic sediments, and to assess the usefulness of these endpoints in sediment toxicity biotesting. A highly contaminated sediment sample from the Baltic Sea was diluted with sediment from a clean site to come up with a series of 5 test sediments with dilutions from 1:32 to 1:1024, and the reference sediment. The 1:32 dilution of the test sediment was analyzed for organotins (2862 µg tin [Sn] kg dry wt –1), polycyclic aromatic hydrocarbons (6064 µg kg dry wt –1), and selected trace metals (e.g., copper 352 mg kg dry wt –1). The survival rate of G. fasciatus (10‐d toxicity test) was 100% in the reference and 1:1024 treatments, and began to decline from the 1:256 dilution onward. In a 28‐d experiment, various types of morphological malformations were observed in 11 to 80% of the amphipod embryos in the 1:64, 1:128, and 1:256 dilutions, with only <5% in the reference treatment. Also, elevated activities in the antioxidant defense system enzymes glutathione S‐transferase and catalase were observed in amphipods exposed to the contaminated sediments compared with the reference treatment, with responses at lower contamination levels compared with the appearance of malformations in the embryos. The results obtained illustrate the effectiveness of the combined application of embryonic malformations and antioxidant defense system biomarkers in amphipods in the assessment of sediment toxicity, and potentially also of sublethal effects of chemical contamination in aquatic ecosystems. Environ Toxicol Chem 2019;38:2020–2031. © 2019 SETAC.