Legislation and interest exists to protect and restore freshwater and marine ecosystems from the environmental impact of aquaculture. However, aquaculture-induced eutrophication remains a major environmental concern. Water soluble phosphorus, uneaten feed, feces, and metabolic waste from farmed fish increase phosphorus concentrations in adjacent waters. In open freshwater fish farms, in particular, the effects can be more immediate, as excess phosphorus is introduced directly into ecosystems. Several intestinal enzymes, transporters, and regulating factors have been implicated in farmed fish dietary phosphorus retention. For example, alkaline phosphatase and other transporters aid in the absorption of phosphorus in the anterior intestine, while pH, calcium, and vitamin D influence these enzymes and transporters. This process may also be influenced by intestinal morphology and the gut microbiome. To reduce phosphorus pollution from open flow fish farms, a thorough understanding of the processes that affect nutrient retention and absorption, as well as the impact of dietary factors, anti-nutritional substances, and intestinal morphology, is required. Aquaculture can be made more sustainable by reducing phosphorus release. This can be achieved by optimizing feed composition, adding functional feed ingredients, managing gut health, and treating effluent aquaculture waters with bioremediation and absorbing materials. Anti-nutritional factors can be mitigated through processing and through the use of functional feed additives. Addressing these issues will reduce aquaculture’s environmental impact, ensuring aquatic ecosystem health and global food security. In addition, treating effluent aquaculture waters with bioremediation and absorbing materials can remove phosphorus from the water, preventing it from entering the environment. This can further reduce the environmental impact of aquaculture and help to ensure the sustainability of this sector.