Fish and seafood consumption in Australia has been growing, yet the implications of this trend across the food system, from both a health and sustainability perspective have not been fully explored. This paper aims to map out the fish and seafood food system in Australia, linking production and consumption, to articulate challenges and opportunities for enhancing the sector’s contribution to future healthy and sustainable diets. We conducted a secondary analysis of publicly available datasets on fish and seafood production and consumption, triangulated and supplemented with peer-reviewed and grey literature on environmental, economic and social sustainability issues throughout the food system. A key challenge for health is the high proportion of fish and seafood consumed as discretionary food, particularly among children. Key challenges for sustainability include the narrow focus on environmental sustainability (with little consideration of the other domains), and the focus on production with little consideration for sustainability throughout post-harvest handling, processing, retail, distribution and consumption. Key opportunities for health and sustainability include the innovative use of processing and packaging technology to maximise nutritional quality; creation of markets and supply chains for a greater diversity of underutilised fish and seafood species and processing by-products; and reductions in waste and loss throughout the entire supply chain.