Phenotypic differences often stem from genetic/maternal differences and/or early-life adaptations to local environmental conditions. In colonial animals, little is known on how variation in the social environment is embedded into individual phenotypes, nor what the consequences are on individual fitness. We conducted an experimental cross-fostering study on king penguins (Aptenodytes patagonicus), exchanging eggs among 134 pairs breeding in high-density (67 pairs) or low-density (67 pairs) areas of the same breeding colony. We investigated differences in parent and chick phenotypes and survival in relation to the density of their origin and foster environment. Adults breeding in colony areas of high density exhibited decreased resting behaviour and increased aggression and vigilance, increased hypometabolism during incubation fasts, and more moderate corticosterone responses shaped by exposure to chronic stressors (e.g. constant aggression by neighbours). Chick phenotypes were more influenced by the environment in which they were raised than their genetic/maternal origin. Chicks raised in high-density colonial environments showed enhanced weight gain and survival rates regardless of the density of their genetic parents' breeding areas. Our study experimentally shows advantages to breeding in colonial areas of higher breeder densities in king penguins, and highlights the importance of social settings in shaping phenotype expression in colonial seabirds.