Host density thresholds are a fundamental component of the population dynamics of pathogens, but empirical evidence and estimates are lacking. We studied host density thresholds in the dynamics of ectoparasitic sea lice (Lepeophtheirus salmonis) on salmon farms. Empirical examples include a 1994 epidemic in Atlantic Canada and a 2001 epidemic in Pacific Canada. A mathematical model suggests dynamics of lice are governed by a stable endemic equilibrium until the critical host density threshold drops owing to environmental change, or is exceeded by stocking, causing epidemics that require rapid harvest or treatment. Sensitivity analysis of the critical threshold suggests variation in dependence on biotic parameters and high sensitivity to temperature and salinity. We provide a method for estimating the critical threshold from parasite abundances at subcritical host densities and estimate the critical threshold and transmission coefficient for the two epidemics. Host density thresholds may be a fundamental component of disease dynamics in coastal seas where salmon farming occurs.