There is a growing concern about the use of fisheries-derived proteins in aquaculture. This study was conducted to investigate the effect of either partially or totally replacing fishmeal (up to 15% of the diet) by the inactivated dry yeast product DY-Pro in Nile tilapia Oreochromis niloticus diets. The DY-Pro replaced 0% (DY-PRO0), 2% (DY-PRO2), 5% (DY-PRO5), 25% (DY-PRO25), 50% (DY-PRO50), 75% (DY-PRO75) or 100% (DY-PRO100) of the protein provided by fishmeal in seven isonitrogenous and isocaloric experimental diets, which were fed to the experimental fish (initial average body weight 11.33 ± 1.65 g) for 12 weeks. At the end of the experiment, the graded replacement of 2–100% of fishmeal protein by the DY-Pro did not significantly (P < 0.05) affect fish weight gain or gut length and weight, but linearly (P < 0.05) improved feed and nutrient utilization. Moreover, the DY-Pro did not have any negative impacts on the gastrointestinal tract as shown by histopathology. There were no pathogens or signs of significant metabolic or toxicant-related disease in the epithelium. Results showed that tilapia given diets containing DY-Pro consumed less feed to achieve the same weight gain as tilapia given fishmeal-based diets. Overall, the DY-Pro is a good feed ingredient, which could totally replace fishmeal in Nile tilapia diets and possibly lead to reduced feed costs.