General morphology of the lateral line of juvenile steelhead trout, Salmo gairdneri, is described. Through electrophysiological monitoring of individual nerve fibres, control patterns for spontaneous activity and reaction to sensory receptor stimulation were established. Spontaneous activity has a positive correlation with temperature and number of receptors innervated. Presence of directional sensitivity and response to near field water displacement at different frequencies is similar to that found in other fishes and amphibians. Normal lateral line response to a standardized set of stimuli was compared with the response of fish affected by gas‐bubble disease. Results show that as gas emboli formed in the scale pockets of the trunk lateral line of stressed fish, the ability to respond to stimuli was either diminished or completely disappeared. Further testing demonstrated that this sensory loss was reversible and that upon return to equilibrated water gas emboli disappeared and normal function was regained. This sublethal effect of gas‐bubble disease on the lateral line sensory system may be an important element contributing to indirect mortality.