Fish tissues, particularly rich in n-3 PUFA, are prone to lipid peroxidation that can damage cellular membranes, cause severe lesions and subsequently incidences of disease and mortality. However, fish possess antioxidant defences, such as vitamin E (VE) and antioxidant enzymes, to protect them against oxidative damage. This study investigated the effects of an increasing gradient of oxidized dietary lipid on the survival, growth performance, skeletogenesis and antioxidant defensive processes occurring in Senegalese sole (Solea senegalensis) larvae. Four groups of fish were fed live prey enriched with experimental emulsions containing an increasing gradient of oxidized oil: non-oxidized, NO+VE, 34.5 nmol MDA g−1 w.w.; mildly oxidized, MO+VE, 43.1 nmol MDA g−1 w.w.; highly oxidized, HO+VE, 63.3 nmol MDA g−1 w.w. and highly oxidized without VE, HO-VE, 78.8 nmol MDA g−1 w.w. The oxidation levels increased in enriched rotifers following the oxidation gradient of the emulsions, but were not affected in enriched Artemia metanauplii. The oxidation status of Senegalese sole larvae increased during development, but this was not related to the dietary treatments. The increasing dietary oxidation levels did not affect the fatty acid profile, survival, growth performance and metamorphosis processes of sole larvae. Senegalese sole seem to activate antioxidant defence mechanisms in response to the increasing amounts of dietary peroxidized lipids, in a manner efficiently enough to prevent detection of any alterations of these physiological processes. Antioxidant systems and detoxification mechanisms appeared to occur through the consumption of dietary α-tocopherol, the activation of the antioxidant enzymes (catalase, superoxide dismutase, glutathione S-transferase, glutathione reductase) and the retention of oxidized fat in the intestinal enterocytes for detoxification prior to their utilization. However, fish fed the highest oxidized diet presented a reduction in bone mineralization, but lower incidence of deformities in the vertebral and caudal regions than fish fed the other diets. This study exemplifies the importance of rearing Senegalese sole larvae on non-oxidized diets during the early larval development to avoid detrimental consequences in older fish, most notably in the process of skeletogenesis.