Effects of global warming on animal distribution and performance become visible in many marine ecosystems. The present study was designed to develop a concept for a cause and effect understanding with respect to temperature changes and to explain ecological findings based on physiological processes. The concept is based on a wide comparison of invertebrate and fish species with a special focus on recent data obtained in two model species of fish. These fish species are both characterized by northern and southern distribution limits in the North Atlantic: eelpout (Zoarces viviparus), as a typical non-migrating inhabitant of the coastal zone and the cod (Gadus morhua), as a typical inhabitant of the continental shelf with a high importance for fisheries. Mathematical modelling demonstrates a clear significant correlation between climate induced temperature fluctuations and the recruitment of cod stocks. Growth performance in cod is optimal at temperatures close to 10°C, regardless of the population investigated in a latitudinal cline. However, temperature specific growth rates decrease at higher latitudes. Also, fecundity is less in White Sea than in North and Baltic Sea cod or eelpout populations. These findings suggest that a cold-induced shift in energy budget occurs which is unfavorable for growth performance and fecundity. Thermal tolerance limits shift depending on latitude and are characterized by oxygen limitation at both low or high temperatures. Oxygen supply to tissues is optimized at low temperature by a shift in hemoglobin isoforms and oxygen binding properties to lower affinities and higher unloading potential. Protective stimulation of heat shock protein synthesis was not observed. According to a recent model of thermal tolerance the downward shift of tolerance limits during cold adaptation is associated with rising mitochondrial densities and, thus, aerobic capacity and performance in the cold, especially in eurythermal species. At the same time the costs of mitochondrial maintenance reflected by mitochondrial proton leakage should rise leaving a lower energy fraction for growth and reproduction. The preliminary conclusion can be drawn that warming will cause a northern shift of distribution limits for both species with a rise in growth performance and fecundity larger than expected from the Q10 effect in the north and lower growth or even extinction of the species in the south. Such a shift may heavily affect fishing activities in the North Sea. © 2001 Elsevier Science Ltd. All rights reserved.