Monodactylus argenteus, is a high-value euryhaline ornamental fish having a good market demand. Information about its nutrient requirement, especially protein, is essential for feed formulation to maintain good health, growth and colouration. A 3-month feeding trial on the fry of this species was carried out to evaluate the effect of varying dietary protein levels on growth, body indices, serum profile, skin carotenoid content and body composition. Hatchery-produced fry (ABW: 0.73 ± 0.08 g) were randomly distributed into 18 glass tanks (90 L water each) in a recirculatory aquaculture system (RAS) @ 10 fry per tank. Five isolipidic micro-diets (75 g kg−1) with graded levels of crude protein (CP) viz. 250 (CP25), 300 (CP30), 350 (CP35), 400 (CP40), and 450 (CP45) g kg−1 were formulated and fed to satiation twice daily. At the end of the trial, weight gain (WG), specific growth rate (SGR) and protein efficiency ratio (PER) of fish fed with CP35, CP40 and CP45 diets were observed to be significantly higher compared to those fed with CP25, and CP30 diets. Protein efficiency ratio (PER) decreased with increased dietary protein levels. The viscerosomatic index (VSI) and hepatosomatic index (HSI), exhibited a decreasing trend as the level of crude protein increased. The IPF was directly proportional to the dietary crude protein content of the diet, the maximum value being obtained in the CP45 treatment. The whole-body crude protein content showed an increasing trend with the increment in dietary protein level up to the CP40 diet and the diet with the highest crude protein exhibited the lowest whole body crude protein content. Analysis of serum profile revealed that serum triglycerides, glucose and protein levels were significantly different (P < 0.05) among the treatments. The group fed with CP40 recorded the highest concentration of carotenoids which was not significantly different from CP30 and CP35 groups. The whole body amino acids profile showed a significant variation in alanine, serine, threonine, glutamine and glycine. Broken-line regression analysis revealed that the optimum dietary protein level was in the range of 325–349 g kg−1 for maximum growth of silver moony fry. Our study revealed that a minimum of 35% protein in the diet of silver moony fry is optimal for improved growth.