Diamond-backed Terrapins inhabit coastal salt marshes along the eastern and Gulf coasts of North America. Terrapins are adapted to intermediate salinities yet frequently face saltwater-inundated marsh habitat exceeding 25 ppt (or grams/kilogram). We investigated the effect of salinity on the growth of hatchling terrapins and on their compensatory responses to salinity stress. We randomly assigned 30 terrapin hatchlings each to one of five salinity treatments (1, 5, 10, 20, or 35 ppt). Over 75 d, we regularly monitored behavior, appetite, and changes in growth; and calculated ratios of heterophils to lymphocytes (H:L ratio) to assess responses to prolonged salinity stress. Consistent with prior studies, chronic exposure to high salinity significantly reduced hatchling growth. Hatchlings in 20-ppt and 35-ppt salinities exhibited appetite suppression and saltwater avoidance and were more likely to show freshwater-seeking behaviors. H:L ratios were higher among hatchlings in 20- and 35-ppt salinities, consistent with a corticosterone-driven stress response to sustained high-salinity exposure, which may play a role in limiting growth. Our findings suggest hatchling growth and distribution among local habitats will vary spatially depending on habitat salinity and freshwater accessibility. The growth-limiting effects of chronically high salinity or limited access to freshwater could therefore increase hatchling mortality and be an important driver of spatial variation in terrapin demography and abundance. However, when freshwater sources are available, compensatory behaviors might reduce growth-limiting effects. Terrapin recruitment is likely to be impacted as rising sea levels, increased human water use, land development, and other anthropogenic changes alter freshwater inputs to coastal marshes.