Global seafood supply is increasing, and seafood prices are steady despite plateauing global capture fishery harvests and reports of collapsing fish stocks. The reason is that aquaculture (farming seafood) is a rapidly growing food production technology that now accounts for roughly half of global seafood supply. Aquaculture is a key contributor to food security, but fish farming interacts closely with the surrounding ecosystem, and its rapid growth globally raises many environmental concerns. Potential negative externalities include water quality, disease spillovers, wild-domesticated genetic interactions, overuse of antibiotics, and the effects of reliance on wild-caught fish for feed on fish stocks . We show that the environmental externalities can be positive as well as negative, some are not true externalities because firms have incentives to internalize them, some perceived externalities do not exist, and the remaining ones can be addressed primarily through spatial management. Because outcomes are strongly influenced by governance of space, management challenges include both commons and anti-commons problems. We conclude that governance should focus on spatial management, adaptation to climate change, and facilitating technological innovation to address externalities and encourage sustainable development of the sector.