Fisheries catches worldwide have shown no increase over the last two decades, while aquaculture has been booming. To cover the demand for fish in the growing human population, continued high growth rates in aquaculture are needed. A potential constraint to such growth is infectious diseases, as disease transmission rates are expected to increase with increasing densities of farmed fish. Using an extensive dataset from all farms growing salmonids along the Norwegian coast, we document that densities of farmed salmonids surrounding individual farms have a strong effect on farm levels of parasitic sea lice and efforts to control sea lice infections. Furthermore, increased intervention efforts have been unsuccessful in controlling elevated infection levels in high salmonid density areas in 2009-2010. Our results emphasize host density effects of farmed salmonids on the population dynamics of sea lice and suggest that parasitic sea lice represent a potent negative feedback mechanism that may limit sustainable spatial densities of farmed salmonids.