In New Zealand and Nova Scotia, lobster (Jasus edwardsii and Homarus americanus, respectively) is the most valuable export fishery. Although stock assessments and indicators assist in evaluating lobster fisheries, ecosystem effects are largely unknown, hindering ecosystem-based fisheries management (EBFM). We employed ecosystem models for the Cook Strait, New Zealand and western Scotian Shelf, Nova Scotia, Canada, to evaluate trade-offs between catches and ecosystem impacts in lobster fisheries from single- and multi-species perspectives. We ran simulations to independently determine exploitation rates that produced maximum sustainable yield (MSY) for lobster, and for all fished groups. We then ran simulations using these MSY exploitation rates simultaneously, and simulations to maximize multi-species MSY (MMSY). Our results indicate that current lobster exploitation rates in both regions are greater than those producing MSY, and have significant ecosystem impacts. Simulating multi-species fisheries, in both systems the sum of single-species MSY for all fished groups was less than the sum of catches where exploitation rates were run simultaneously. Runs maximizing MMSY across the entire ecosystem increased exploitation rates on many fished groups, and produced even greater total catch—yet with much greater ecological costs—and in Nova Scotia, collapses of sharks, large predators, and lobster themselves. As fisheries management moves towards multi-species and ecosystem-based approaches, we suggest that MMSY targets should be treated similarly to MSY—not as a target, but a limit. Even then, careful evaluation is required before implementation to ensure that there are no undesirable economic or ecological consequences.