The SE Pacific stock of Patagonian grenadier (Macruronus magellanicus) showed evidence of an abrupt reduction in recruitment after 2000. This drop exceeded expectations from changes in the spawning stock biomass (SSB), indicating a change in the stock-recruitment relationship (S-R). We evaluated whether variability in recruitment could be explained by concurrent changes in three environmental indices: sea-surface temperature anomaly (SSTA); southern oscillation index (SOI); and latitudinal position of the west wind drift bifurcation (WWDL). Continuous and discrete effects of these indices were tested as covariates in linear log-log and non-linear Ricker's S-R models. Discrete effects represented regime shifts detected in SSTA (1998), SOI (1998) and WWDL (1995). While SSTA was the only continuous variable found to be significant, the discrete 1998 regime shift supported the most informative model. The best Ricker's model considered a discrete intercept change in the same year: 1998. Although a spurious correlation between SSTA and S-R changes is possible, SSTA may be reflecting major physical or biological changes relevant to M. magellanicus juveniles in the SE Pacific. © 2013 The Royal Society of New Zealand.