The future of European eel aquaculture depends on closing the life cycle in captivity. Present focus is on developing suitable larval rearing technology. This study explored new salinity reduction applications to elucidate performance thresholds of European eel larvae produced under realistic hatchery conditions, using Kreisel tanks and recirculating aquaculture systems for larval culture. The study links eel larval survival and biometrics to expression of genes related to underlying molecular mechanisms by taking parental effects into account. Larvae from different families were reared either at constant salinity of 36 psu (Control) or subjected to salinity reduction (36 to 18 psu) initiated 3 days post hatch (dph) and at a rate of 4 psu/day, occurring either within 1 h (Fast) or 24 h (Slow). An extreme scenario, reducing salinity directly from 36 to 18 psu within 1 h on 6 dph (Drastic) was also tested. Early and gradual salinity reduction (Slow or Fast) led to increased growth rate and larger larvae, while influencing the expression of dio3 (deiodination mechanism and thyroid endocrine system). Expression of atp6 and cox1 (energy metabolism) was constant, indicating that energy metabolism was stable and independent of salinity, while expression of nkcc1a (ion regulation) was upregulated in the Control, suggesting an upregulation of active Na+, K+, and Cl− transport and thus increased cellular energy consumption. This explained that eel larvae experiencing an early and progressive salinity reduction, used their energy reserves more efficiently, leading to improved growth and survival. However, salinity reduction caused heart edema. Expression patterns of 12 genes [stress/repair (hsp90), immune response (mhc2), neurogenesis (neurod4), deiodination (dio2), thyroid metabolism (thαa, thαb, thβb), energy metabolism (atp6), skeletogenesis (bmp2b, bmp5), growth (igf2b), ion regulation (nkcc2b)] on 6 dph and 5 genes [water transport (aqp3), immune response (il1β), thyroid metabolism (thβb), skeletogenesis (bmp5), heart development (nppb)] on 12 dph were driven by genotype (family) × environment (salinity) interactions, revealing batch specific phenotypic plasticity and describing a genetic programming of molecular mechanisms and intrinsic sensitivity to environmental drivers that need to be considered in future eel aquaculture. In conclusion, early and progressive salinity reduction (Fast or Slow) benefits larval eel growth and survival, but emerging implications regarding heart edema need to be addressed in future studies. On the other hand, we show that biotechnical difficulties for introducing salinity reductions, can be circumvented by directly moving larvae from seawater to isoosmotic conditions, but suited application timing needs to be explored.