Lipid deterioration of mackerel caught in Icelandic waters was studied, as affected by different frozen storage temperatures (−18 °C vs. −25 °C) and seasonal variation (August vs. September). The lipid stability was investigated by analyses of hydroperoxide value (PV), thiobarbituric acid reactive substances (TBARS), free fatty acids, as well as changes in fatty acid composition. Results showed significant lipid deterioration with extended storage time, where the lower storage temperature showed significantly more protective effects. Furthermore, a higher lipid oxidation level was recorded for fish caught in September than in August, although lipid hydrolysis occurred to be greater for fish in August than in September. Moreover, results indicated a rather stable level of omega-3 fatty acid during the whole frozen storage period. The analysis indicated that both lipid oxidation and hydrolysis were affected by the frozen storage temperature and the stability differed with regard to season of catch.