This study investigated the effects of replacing dietary fish oil (FO) with palm oil (PO) on the growth performance, proximate composition, antioxidant capacity, and inflammatory responses of juvenile greenfin horse-faced filefish, Thamnaconus septentrionalis. Five isonitrogenous and isocaloric diets with varying levels of PO inclusion (0%, 25%, 50%, 75%, and 100%) were prepared, and each diet was administered in triplicate to juvenile fish for 10 weeks. Results indicated that moderately partial replacement of FO did not result in detrimental effects whereas complete or high-level replacement of FO compromised survival, growth, and feed utilization. Moderate PO inclusion slightly increased the antioxidant capacity. However, this effect was significantly impaired by high levels of dietary PO. The moisture and ash content of whole fish showed an increasing trend, while crude lipid and crude protein content tended to decline, showing significant linear response. Dietary PO appeared to affect triglyceride synthesis, albeit with minimal impact on the lipid content of the liver. Fatty acid compositions in both liver and muscle tissues were linearly correlated with dietary FA profiles, with fish liver being more reflective of dietary fatty acid composition than muscle tissue. ARA, EPA and DHA were selectively retained in the muscle tissue, whereas EPA retention was significantly reduced in the liver tissue with the gradual replacement of FO. High levels of PO inclusion in the diet resulted in elevated gene expression related to hepatic inflammation, including TLRs, MyD88 and TNFa. In conclusion, palm oil could potentially serve as an alternative to fish oil in the diet for juvenile T. septentrionalis, with up to 50% substitution without deteriorating growth performance, n-3 LC-PUFA deposition in muscle, and health status of juvenile greenfin horse-faced filefish.