Offspring, especially during early development, are influenced by both intrinsic properties endowed to them by their parents, extrinsic environmental factors as well as the interplay between genes and the environment. We investigated the effects of paternity (P), temperature (T), and asynchronous hatching on larval traits of cod, Gadus morhua from the Atlantic Ocean and the Baltic Sea. Daily cohorts of 4 half-sib families of Atlantic larvae and 5 half-sib families of Baltic larvae were incubated and hatched at 5 temperatures (Atlantic 2.0–10.0 °C, Baltic 6.5–12.5 °C) and imaged for notochord length (LN), yolk-sac area (AY), and deformities. Larvae hatching on a given day were incubated at the same temperature and sampled at 4 days post-hatch (DPH) for growth, yolk utilization rate (YUR) and efficiency (YUE). The mean ± SE duration of the hatching window decreased with increasing temperature in both Atlantic (5.4 ± 0.1 to 2.6 ± 0.3 days from 2.0 to 10.0 °C) and Baltic larvae (6.2 ± 0.4 to 5.0 ± 0.6 days from 6.5 to 12.5 °C) and LN increased and AY decreased for every subsequent day of hatch. Deformities increased with increasing T and P × T explained 52.3 and 26.8% of the variance for Atlantic and Baltic larvae, respectively. In Baltic larvae, size at peak hatch tended to decrease with increasing T and P × T explained 34.6% of the variance. In Atlantic larvae, growth, YUR and YUE were influenced by T while P alone explained 26.0% of the variance in YUE and up to 66.4% of variance in morphological traits at 4 DPH. Asynchronous hatching significantly affected larval growth, YUR, and YUE with P explaining 37.1% of the variance in growth for Atlantic larvae. Temperature and asynchronous hatching interacted to produce larvae that were generally longer and had smaller AY if they were incubated at colder temperatures or if they hatched at the end of the hatching period at a specific temperature. Differences in larval morphometrics among temperatures for early hatching larvae decreased or even reversed for later hatching larvae. In light of anticipated global climate change, the present study on cod provides further insight in understanding the genotype-based variability and the adaptive potential to an ecologically changing environment.