Hydroacoustic single fish detection and corresponding hydrographic measurements were used to study seasonal changes in vertical distribution of adult cod (Gadus morhua) in relation to ambient environmental conditions in the Bornholm Basin, central Baltic Sea. Sampling was conducted in April, June and August covering the years 2006–2009. Vertical distribution of individual fish was resolved from hydroacoustic single-target detection in combination with a fish-tracking algorithm and related to ambient hydrographic conditions. Based on a generalized linear effect model, both salinity and oxygen concentration were identified as key parameters affecting cod vertical distribution. Results also showed a clear seasonal effect with a more shallow distribution as the spawning season progressed and oxygen concentrations in the deep parts of the basin deteriorated. The upper limit of the distributional range was mostly constituted by the halocline and remained rather constant, whereas increasing oxygen depletion in the deep water layers lifted the lower boundary of the vertical distribution, leading to the observed upward shift in the overall distribution pattern. The results presented in this study highlight a significant shortcoming of the assessment survey design established for this species, as the observed shift in vertical distribution is not taken into account, thus introducing a potential bias into a data series used to tune the ICES standard stock assessment of this species.