Optimization of ideal stocking density in intensive aquaculture system is a challenging appraisal. Higher stocking density is inducing chronic stress, impacting negatively on physiology and increasing disease associated risks in fish. Hence, the study was designed to evaluate the water quality, growth performance, health status and flesh quality of striped catfish (Pangasianodon hypophthalmus). The fish (2.61–2.64 ± 0.01 g initial body weight) were reared in randomly designed variable stocking densities (SDs) including five treatments (30, 40, 50, 60 and 70 fish m−3) in triplicates at C:N ratio 15:1 in jaggery supplemented biofloc system for 120 days in 1000 –L experimental fiber-reinforced plastic tanks. SD30 acted as control treatment having low stocking density. During the culture, pH, alkalinity and dissolved oxygen level decreased and BOD increased with increased stocking density. TDS and TSS level increased upto SD50 treatment and further decreased in higher stocking density treatments. Higher population of heterotrophic, ammonifying and nitrifying bacteria significantly (p < 0.05) reduced TAN, NH3-N, NO2-N, and elevated NO3-Nas well as rate and potential of ammonification and nitrification in SD50 treatment than other treatments. Bacillariophyceae and protozoa were most dominant group in the biofloc microbiome in all the treatments. Highly elevated biofloc volume, floc microbiome, good floc characteristics and floc quality might have enhanced fish survival rate, body weight gain, SGR through improving FCR in SD50 than other SDs. Moreover, higher population of gut microbiota (TPC and probiotic) and elevated digestive enzymes activity in fish reared in SD50 treatment significantly (p < 0.05) enhanced PER, ANPU, and somatic indices (GSI and HSI) as well as enhanced colour (lightness, yellowness/blueness and whiteness), flesh quality and hardness. Fish reared in SD50 treatment showed significantly (p < 0.05) higher haematological (TEC, TLC and Hb), immunological (TSP, albumin, RBA and lysozyme), antioxidant responses (higher SOD and CAT) and lower metabolic stress enzymes responses (ALT, AST and glucose). Moreover, fish reared in SD50 treatment showed improved villi surface area and height in intestine and slightly vacuolated hepatocytes in liver. Overall, significantly (p < 0.05) better water quality, fish performance, health status and flesh quality were observed in SD50. Collectively, the findings suggest that farmers can be benefitted by fetching higher production through suitable stocking density (50fish m−3) of P. hypophthalmus in biofloc with improved water quality, growth performance, health status and flesh quality.