λ‐Cyhalothrin (λ‐cyh) is widely used in agricultural production and has been reported to cause damages to numerous nontarget insects. As an important economic and model insect of Lepidoptera, Bombyx mori was extremely sensitive to λ‐cyh, and pesticide drift often leads to silkworm poisoning. However, little is known about the persistence of sublethal effects or the potential recovery from short‐term exposure to sublethal doses of pesticides. In this study, we estimated the sublethal effects caused by short‐term exposure (24 h) of λ‐cyh LC1, LC10, LC25, and LC50, respectively, and investigated the persistent negative effects on the growth, survival, and pupal metamorphosis of silkworm larvae. Silkworm growth was mostly retarded after λ‐cyh exposure, with dose‐dependent recovery observed at delayed time points. Relative to the control, the treatment groups showed significantly higher larval mortalities and abnormal pupa rates. Additionally, transcriptome sequencing was conducted to investigate the effects of λ‐cyh LC10 on the normal physiological functions in the midgut of B. mori. A total of 2697 differentially expressed genes were identified, and 57.1% of DEGs were down‐regulated. Gene ontology and Kyoto encyclopedia of genes and genomes enrichment analysis further revealed that energy and nutrient metabolisms were negatively affected. Moreover, we demonstrated that sublethal λ‐cyh inhibited the oxidative phosphorylation pathway by reducing the expression of mitochondrial electron transport chain complex genes and consequently the synthesis of ATP. This study has provided useful transcriptome‐wide expression resources to facilitate the overall knowledge of the molecular basis of sublethal toxicity caused by λ‐cyh in the midgut of B. mori.