The efficacy of pharaoh cuttlefish (Sepia pharaonis Ehrenberg, 1831) liver lipid in the feed for juveniles of giant freshwater prawn Macrobrachium rosenbergii (De Man 1879) was tested by feeding five experimental diets prepared using clam meat, groundnut oil cake, wheat bran, tapioca powder, vitamin–mineral mixture and cellulose powder as the major ingredients. The test diets T1, T2, T3, T4 and T5, containing five levels (1, 2, 3, 4 and 5%, respectively) of lipid, extracted from the liver of pharaoh cuttlefish, were fed to 30‐day‐old prawn juveniles for 60 days, in triplicates and compared against a control. Analysis of variance of the growth parameters showed that the juveniles fed with T2, containing 2% cuttlefish liver lipid with a total lipid content of 9.85% and lipid–carbohydrate ratio of 1 : 3.8, showed significantly better growth (P < 0.05) with the highest weight gain of 118%, greatest food conversion and protein utilization efficiency, and the highest body protein content, although the survival rates remained unaffected among treatments. Growth of the juveniles, however, declined at lipid levels >2%. Addition of cuttlefish liver lipid led to an increase of ω‐3 and ω‐6 fatty acids in T2, the proportion of ω‐6 being higher than the former. The crude lipid content of the body of test animals also increased with the increase in dietary lipid from 1.51% in T1 to 3.27% in T5. The present study indicates that cuttlefish liver lipid can be successfully used as a substitute for conventional lipid sources in rearing juveniles of giant freshwater prawn, an eco‐friendly practice in recycling cuttlefish waste – a discarded fishery by‐product.