In the present study, Indian shrimp, Penaeus indicus, were fed on diets supplemented with basil (Ocimum basilicum) oil (BO) to observe the growth performance, antioxidant and innate immune responses, and the resistance against Vibrio parahaemolyticus infection. The animals (5.0–5.5 g) were fed on diets supplemented with 0.0 (control), 1.0, 2.5 and 5 g BO/kg diet over 90 days. After the feeding trial, animals were intramuscularly injected by V. parahaemolyticus and observed for 96 h for mortality or any abnormal signs. Growth‐stimulating effects of dietary BO supplementation on final weight, weight gain percentage, specific growth rate and feed intake were observed. No significant differences were found in feed conversion ratio, protein efficiency ratio, protein productive value and animal survival. Feeding the animals on BO‐enriched diets did not significantly affect the chemical proximate composition of animals’ muscles. Increased values of total protein, albumin and globulin were observed in BO‐fed animals; meanwhile, aspartate and alanine aminotransferases as well as creatinine and urea levels significantly decreased in animals fed 2.5–5.0 g BO/kg diet. Activities of superoxide dismutase, catalase, glutathione peroxidase, lysozyme and phenol oxide activity significantly (p < .05) increased in the BO‐fed fish, with highest values in treatments of 2.5–5.0 g/kg diet. The dietary BO supplementation significantly (p < .05) decreased levels of malondialdehyde and nitrous oxide. After the bacterial challenge, 66.7 percent of animals in the control group were dead. The BO‐fed animals were more resistant against bacterial challenge especially at levels of 2.5–5.0 g/kg diet, which showed high relative percentage of survival (80.0–86.7 percent). In conclusion, dietary BO supplementation with levels of 2.5–5.0 g/kg diet proved beneficial effects to Indian shrimp where growth performance, antioxidant systems and innate immunity were stimulated. It also promoted the challenge of Indian shrimp against V. parahaemolyticus infection.