This study examines the effects of varying dietary lipids on growth, survival, lipid composition and behaviour in lobster Homarus americanus (Milne Edwards, 1837) postlarvae. Lobsters were fed one of 3 diets during their early ontogeny: (1) Artemac, a widely used Artemia replacement; (2) a ternary mixture consisting of Artemac, frozen Artemia adults and Artemia flakes; or (3) a mixture of live A. salina nauplii and adults. We evaluated the olfactory capacity (response to predator odour plume) and cryptic behaviour (ability to hide during settlement) of lobster postlarvae as a function of these diets and the lipid and the fatty acid composition of lobsters. Growth and survival of lobster postlarvae were highest in those fed live Artemia, followed by the ternary mix, then Artemac. The low performance of lobster postlarvae fed Artemac may be attributable to dietary deficiencies in phospholipids (PLs) or 20:4n-6 and coincided with low levels of endogenous triacylglycerols (TAG). Those lobsters fed live Artemia showed low levels of 22:6n-3 and 20:5n-3 compared to levels occurring in wild animals. Here we report the selective incorporation of 20:4n-6, 20:5n-3 and 22:6n-3 to polar lipids and, to a lesser extent, to neutral lipids in lobsters. Finally, lobster postlarvae fed the 3 experimental diets responded to a predator odour plume by reducing their activity levels and increasing the time spent swimming downstream. However, lobster settlement behaviour varied as a function of the diet: low-performing lobsters fed Artemac were less active than those fed the other diets, presumably due to low levels of endogenous TAG or changes in dietary long-chain PUFA.