Monitoring seabird diet can provide insights into marine ecosystems that are logistically difficult or costly to observe with traditional fisheries survey methods. Using digital photography, we described the diet of greater crested terns (Thalasseus bergii) breeding on Montague Island (36°15′ S, 150°13′ E), a colony located in an oceanographically dynamic region of southeast Australia. We investigated how the type and size of prey brought back to the colony changed in relation to both breeding stage and variation in local environmental conditions. 2469 prey items were identified to species or family level over 35 consecutive days of photo-sampling in 2018. Australian anchovy (Engraulis australis), a surface-schooling clupeid fish, was the most abundant prey returned to the colony during all breeding stages (84.5%). The proportion of anchovy increased from 77.0% when birds were provisioning their adult partners during incubation, to 92.4% when they were provisioning chicks, suggesting selective foraging behaviour on this energy-rich species to facilitate rapid chick growth. Anchovy size was significantly larger during incubation (91.1 ± 14.9 mm), smaller during early chick provisioning (71.8 ± 11.0 mm), and increased slightly during mid provisioning (79.6 ± 11.9 mm), indicating adaptive prey selection that is matched to the physical requirements of different breeding stages. The proportion of anchovy prey was also influenced by sea surface temperature (SST), with anchovy becoming more dominant with increasing local SSTs, up to ~ 17.5 °C. This study gives new insight into the types of prey that are seasonally available to predators in this region. The strong specialisation by greater crested terns for one energy-rich species of schooling fish (anchovy) suggests that variation in the size and composition of their prey may serve as an indicator of change in the pelagic ecosystem off southeast Australia.