Larvae of bony fish swim in the intermediate Reynolds number (Re) regime, using body- and caudal-fin undulation to propel themselves. They share a median fin fold that transforms into separate median fins as they grow into juveniles. The fin fold was suggested to be an adaption for locomotion in the intermediate Reynolds regime, but its fluid-dynamic role is still enigmatic. Using three-dimensional fluid-dynamic computations, we quantified the swimming trajectory from body-shape changes during cyclic swimming of larval fish. We predicted unsteady vortices around the upper and lower edges of the fin fold, and identified similar vortices around real larvae with particle image velocimetry. We show that thrust contributions on the body peak adjacent to the upper and lower edges of the fin fold where large left-right pressure differences occur in concert with the periodical generation and shedding of edge vortices. The fin fold enhances effective flow separation and drag-based thrust. Along the body, net thrust is generated in multiple zones posterior to the centre of mass. Counterfactual simulations exploring the effect of having a fin fold across a range of Reynolds numbers show that the fin fold helps larvae achieve high swimming speeds, yet requires high power. We conclude that propulsion in larval fish partly relies on unsteady high-intensity vortices along the upper and lower edges of the fin fold, providing a functional explanation for the omnipresence of the fin fold in bony-fish larvae.