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Early life history traits of small pelagic fish are usually affected by environmental conditions. Patagonian sprat, Sprattus fuegensis, is a small pelagic fish that inhabits the continental shelf, fjords and channels of Patagonia. Their larvae are usually exposed to large variations in physical and biological conditions. We evaluated the effects of environmental conditions on early life history traits of this key species encompassing over 20 years of information. The characterization of oceanographic features, larval abundance and distribution was carried out in western Patagonia between 1996 and 2019, while the growth and mortality rates were estimated for the austral spring 2019 between 49°54′S and 53°55′S. Larval abundance decreased three to ten times from 1996 to 1997 to the rest of the study period (2008–2010 and 2014–2019), with larger abundances being found over the shelf. In spring 2019, the growth rate was 0.20 ± 0.05 mm d−1 for larvae between 9 and 19 days after hatching. The growth rate was similar in partially stratified (7–50 J m−3) and stratified waters (50–100 J m−3), but slower in mixed waters (< 7 J m−3). GAM modelling showed that the faster larval growth occurred in partially stratified waters with temperatures above 7.5°C. Natural mortality rates were higher in partially stratified waters (24% of daily loss), lower in stratified areas (14%) and the lowest in the mixed water column (12%). Accordingly, larvae living in channels had faster growth rates but higher daily mortality, while those that hatched or were advected to water parcels on the continental shelf had slower growth but lower daily mortality. Finally, these latter traits may be an example of an inverse growth‐selective survival strategy. [ABSTRACT FROM AUTHOR]