Modified handling is often claimed to reduce (sub-)lethal impacts among organisms caught-and-released in fisheries. Improving welfare of discarded fish warrants investigation, when their survival is of both economic and ecological importance. In this study, juvenile yellowfin bream (Acanthopagrus australis) were trawled in an Australian penaeid fishery and then discarded after on-board sorting in either dry or water-filled (modified) trays and with delays in starting sorting of either 2 or 15 mins. Blood plasma cortisol, glucose and potassium were sampled immediately from some yellowfin bream, while others were placed into cages (with controls) and sampled after five days. Irrespective of their on-board handling, all trawled fish incurred a relatively high acute stress response (i.e. an increase in Mean ± SE cortisol from a baseline of <4 to 122.0 ± 14.9 ng/mL) that was mostly attributed to the trawling process, and exacerbated by variation in key parameters (low salinity, changes in water temperature and the presence of jellyfish Catostylus mosaicus in catches). When C. mosaicus was present, the potassium concentrations of fish sampled immediately after sorting were significantly elevated, possibly due to nematocyst contact and subsequent inhibition of ion pumps or cytolysis. Stress also increased during handling in response to warmer air temperatures and longer exposure. While most fish had substantially recovered by 120 hours after discarding, deploying selective trawls (to reduce jellyfish) for short periods and then quickly sorting catches in water would benefit discard welfare.