Buffalo plays a compelling role in reducing malnutrition and ensuring food to the people of Asian countries by its major contribution to milk and meat pool of the livestock agriculture farming system in the region. As Asia is the home for more than 90% of world buffalo population, they are also one of the largest emitters of greenhouse gasses. Eucalyptus (Eucalyptus sp.) leaves are rich sources of naturally occurring essential oils and phenolic compounds, which could modulate rumen fermentation through mitigation of methanogenesis and nitrogen excretion along with stimulation of immune system and production performances of animals. Therefore, the present study investigated the impact of dietary inclusion of eucalyptus (Eucalyptus citriodora) leaf meal (ELM) on voluntary feed intake, rumen functions, methane emission, nutrient utilization, milk yield and fatty acids profile, and immune response in lactating buffalo (Bubalus bubalis). An in vitro experiment conducted with graded dose (10-40 g/kg) inclusion of ELM into the total mixed ration to select ideal level for feeding to lactating buffaloes, an improvement (P < 0.05) in feed degradability (IVDMD), microbial biomass and ruminal volatile fatty acids concentration with reduced (P < 0.05) methane and ammonia-N production were evidenced when ELM was added at 10-20 g/kg DM, beyond which negative effects on rumen fermentation were pronounced. An in vivo experimentation was conducted with sixteen Murrah (Bubalus bubalis) buffaloes of mean live weight, 544.23 ± 10.02 kg; parity, 2-4 at initial stage (~60 days) of lactation with average milk yield of 11.43 ± 1.32 kg and were divided into two groups (CON, ELM) of eight each in a completely randomized design. All the animals were kept individually on wheat straw-based diet with required quantity of concentrate mixture and green fodder. The control group buffaloes were fed a total mixed ration; however, the treatment group (ELM) was supplemented with 10 g/kg DM diet of dry grounded eucalyptus (Eucalyptus citriodora) leaves by mixing with the concentrate mixture. The feeding experiment was conducted for 120 days, including 15 days for adaptation to the experimental diets and 105 days for data recording. The nutrient digestibility (DM, OM, CP, and EE) was improved (P < 0.05) without affecting feed intake (P > 0.05) and fiber digestibility (NDF and ADF) in ELM supplemented buffaloes. Increased (P < 0.05) milk production and rumenic acid concentration (cis 9 trans 11 C18:2 CLA) were demonstrated with comparable (P > 0.05) milk composition and major fatty acids profile of milk in the supplemented buffaloes. Dietary inclusion of ELM reduced (P < 0.05) enteric methane production and fecal excretion of nitrogen. The health status of buffaloes fed ELM improved throughout the experimental period was improved by enhancing cell mediated (P = 0.09) and humoral (P < 0.01) immune responses without affecting (P > 0.05) major blood metabolites. The study described feeding ELM at 10 g/kg diet to lactating Murrah buffaloes as a natural source of phenols and essential oils to increase milk production and CLA content, reduce methane and nitrogen emissions, and improve health status. Thus, feeding of ELM could be beneficial for climate smart buffalo production system for enhancing milk production with lesser impact on environment.