The effect of ambient salinity on the haemolymph variables of Fenneropenaeus indicus and its susceptibility to Vibrio harveyi infection under salinity stress has been studied. Adult shrimps were acclimated to 5‰ (hypo osmotic), 25‰ (iso osmotic) and 35‰ (hyper osmotic) salinity levels and the animals were injected with a mid logarithmic culture of V. harveyi at sub lethal level and haemolymph parameters were analysed. Haemolymph proteins, intracellular superoxide anion production, phenoloxidase (PO), alkaline phosphatase (ALP) and acid phosphatase (ACP) activity were found to be at elevated level both at 5‰ and 35‰ post challenge. The haematological responses showed a progressive increase (P < 0.05) up to post challenge day 5 (PCD 5) followed by a considerable decline at all salinities with the lowest being at 35‰. The alterations in the variables were higher in shrimps held at 5‰. However, the V. harveyi infection was severe in animals held at 35‰. The reduction in the parameters could be correlated with the decrease in survival rate of shrimps at 35‰ with a concurrent increase in V. harveyi at this salinity. Multiple regression analysis revealed that ACP (P < 0.001), haemocyte protein HCP (P < 0.001) and PO (P < 0.05) could explain 91% variability in the shrimp survival. These parameters may be used as effective shrimp health indicators. It is evident from the study that ambient salinity alters the haemolymph variables, modulates the virulence in V. harveyi and makes the shrimps more vulnerable to infection at higher salinity. The virulence of V. harveyi is increased at 35‰ salinity as being evidenced from the high mortality at this salinity. The study emphasizes the importance of salinity as an important environmental factor both in terms of host susceptibility and virulence of the pathogen.