Significant marine heatwaves (MHWs) developed along the Western Australian coast in 1999 and 2011. Despite ecosystem losses and the southwards occurrence of many tropical fish species during and after the extreme MHW in 2011, there have been few studies on the effects of this MHW on seabirds, and no biological impacts related to the 1999 MHW have been reported. Using data from 1986-2019, we investigated the impacts of these events on breeding outcomes, body condition, diet composition, population size and mortality of little penguins on Penguin Island, in the temperate waters off Western Australia. Breeding outcomes were negatively impacted by the MHWs but body condition was not. Diet composition changed after the MHW, with sandy sprat Hyperlophus vittatus, the penguins’ typical major prey component, replaced by scaly mackerel Sardinella lemuru, a tropical fish species. Using an open robust design analysis that accounts for imperfect capture probabilities and staggered annual arrival and departure dates, we found that the population decreased by 80% following the 2011 MHW. Finally, more penguins died from starvation or from novel protozoal parasitic infections in 2011 and 2012 that were potentially introduced with the changed diet. This research highlights that the temporal and spatial influence of MHWs on seabirds depends on several factors. Furthermore, the magnitude and direction of a prey species’ response can be very localised and have significant impacts on avian predators. There are no obvious ways to mediate climate effects, but perhaps measures taken to reduce any synergistic impacts on prey abundance, particularly during MHW events, could be effective.