The aim of this study was to determine the acute toxicity levels of cadmium for Penaeus semisulcatus and elucidate the impact of this heavy metal on gills at two sublethal (250 and 500 ?g L-1) levels for a period of 14 days. The median lethal concentration level (LC50) of cadmium in 24, 48, 72 and 96 h for P. semisulcatus were 8180, 5160, 4000 and 2680 ?g L-1. The gills of the shrimps were dissected out and processed for light and electron microscopic studies. The light microscopic studies revealed several alterations in the histoarchitecture of the gills and the prominent changes include deformity of the secondary gill lamellae, infiltration of hemocytes, malformation at the tip of gill filament, lifting of lamellar epithelium, hyperplasia and swelling of the gill lamellae. The ultrastructural examination exposed detachment of gill epithelium, formation of electron dense deposits in the cuticle, disrupted and damaged microvilli, shrunken nucleus, vacuole formation, swollen mitochondria with disoriented cristae, fragmented endoplasmic reticulum and numerous vacuoles with electron dense granules. These alterations impair vital physiological functions, such as respiration and osmoregulation of the gills, which in turn affect the survival of P. semisulcatus. Therefore, the present study suggests that efficient remedial measures should be adopted to prevent the occurrence of cadmium contamination in the aquatic environment.