Yellow mealworm (Tenebrio molitor) meal was introduced to aquafeed as a suitable protein source to replace fish meal (FM) and soybean meal and, thereby, consistent aquaculture production. However, mealworms should be added at adequate levels due to the presence of antinutritional factors such as chitin. Consequently, sodium butyrate (SB) is suggested to improve feed quality and ensure aquatic animals’ productivity and welfare. In this study, parallel with the protein source (T. molitor meal or FM), dietary supplementation of SB (1 g/kg) is involved as a factor in the 2 × 2 factorial study. The first and the second diets were formulated using FM as a protein source with or without SB, while the third and fourth diets were prepared by replacing FM with T. molitor meal with or without SB supplementation. After 60 days, fish fed with FM or T. molitor and SB showed improved final body weight and weight gain, while those fed with T. molitor without SB had a reduced protein efficiency ratio. Histological analysis revealed that dietary SB improved intestinal histological features by increasing the height and branching of intestinal villi and immune cell infiltration near intestinal crypts in Nile tilapia-fed FM or T. molitor. Furthermore, fish-fed FM or T. molitor and SB had higher Hb, red blood cells, PCV, total protein, and globulin levels than fish-fed respective test diets without SB supplementation. Dietary SB addition to FM or T. molitor-based diets also significantly enhanced blood lysozyme and phagocytic activities, catalase, superoxide dismutase, glutathione peroxidase, and reduced MDA levels. Our results demonstrate that T. molitor meal can replace FM without compromising Nile tilapia’s growth performance and health status. Additionally, SB supplementation improved T. molitor meal utilization by Nile tilapia, thereby significantly enhancing the growth, digestion capacity, intestinal histological features, and antioxidative and immune responses. Consequently, dietary T. molitor meal reduces the reliance on FM and improves the sustainability and efficiency of Nile tilapia production.