Fishery survey cruises conducted in Ashtamudi estuary, Kerala, S.India (latitude 8O45'- 9O 28' N and longitude 75O 28' - 77O 17' E) revealed the unusual occurrence of large shoals of oil sardine, Surdinella longiceps (Val.) young ones contributing to the fishery in the estuary at significant levels. Exploited stock of this species in December was constituted by size ranging from 90 to 159mm with a modal size at 106mm while a remarkable shift in the length composition could be discernible in April, when 92% of the stock was constituted by individuals in the range 120- 139 mm with a modal length at 122mm. An attempt was also made to quantify the exploited juvenile stock of the lake during the study period, which declined significantly from 57.5 tonnes in December, 2000 to 5.4 tonnes in April, 2001. Gill nets and cast nets were found to contribute more than 60% of the total landings. The Ashtamudi estuarine system serving as a nursery ground for fingerlings of oil sardine has been highlighted