Atlantic cod (Gadus morhua) is an important recreational and commercial fisheries target species in the Northern hemisphere. Release rates are high in the recreational fishery due to regulatory and voluntary catch-and-release practice. Although post-release mortality of cod is relatively low, there is potential for further reductions. The most effective way to reduce post-release mortality is to minimize the catch of sublegal fish or non-target species and to reduce hooking injuries by using more selective fishing methods. This study investigated the influence of the lure/bait type on: (1) size of fish, (2) catch and harvest, (3) proportion of bycatch, (4) hooking location, and (5) injury (bleeding) in the western Baltic Sea recreational cod fishery. Data were collected via random onboard sampling of 35 charter vessel angling trips (778 anglers) and during two supplementary studies in the western Baltic Sea. Overall, the median total length was significantly higher for cod caught on artificial lures (39 cm) than for cod caught on natural bait (28 cm), leading to a 43% higher proportion of sublegal (〈38 cm) cod for bait than for lure. Median catch-per-unit-efforts (number of captured cod per angling hour) did not differ significantly between lure and bait angling (both: 0.49 cod per hour), whereas the median harvest-per-unit-effort (number of captured cod ≥ minimum landing size (38 cm) per angling hour) was significantly higher for lure (0.24 cod ≥38 cm per hour) than for bait angling (0.06 cod ≥38 cm per hour). The incidence of deep hooking and severe bleeding was significantly higher for bait angling. Furthermore, bait angling significantly increased bycatch of other species dominated by whiting (Merlangius merlangus) and European flounder (Platichthys flesus). Cod anglers can reduce the catch of sublegal cod and non-target species and minimize hooking injuries of released fish by using lures instead of bait in the western Baltic Sea. Thus, voluntary terminal gear recommendations may be an effective tool for anglers and managers to increase selectivity in recreational cod fisheries.