Rather than benefiting wild fish, industrial aquaculture may contribute to declines in ocean fisheries and ecosystems. Farm salmon are commonly infected with salmon lice (Lepeophtheirus salmonis), which are native ectoparasitic copepods. We show that recurrent louse infestations of wild juvenile pink salmon (Oncorhynchus gorbuscha), all associated with salmon farms, have depressed wild pink salmon populations and placed them on a trajectory toward rapid local extinction. The louse-induced mortality of pink salmon is commonly over 80% and exceeds previous fishing mortality. If outbreaks continue, then local extinction is certain, and a 99% collapse in pink salmon population abundance is expected in four salmon generations. These results suggest that salmon farms can cause parasite outbreaks that erode the capacity of a coastal ecosystem to support wild salmon populations.