Hydrolyzed yeast (HY)-derived protein from Saccharomyces cerevisiae has a high digestible protein content and nucleotides and is a sweetener immunostimulatory substance. This could be used in nursery diets to minimize diarrhea and improve the growth rate and gut health of early-weaned piglets. This research was conducted with the objective of examining the effect of the inclusion level of HY as a potential protein ingredient for early-weaned piglets. A total of 72 crossbred weaned piglets [(Landrace × Large White) × Duroc] were assigned to three dietary treatments in six replicates with four pigs per pen. Dietary treatments were: (i) control (CON), piglets weaned at 18 days; (ii) CON diet with 5% HY inclusion (HY5); and (iii) CON diet with 10% HY inclusion (HY10) in a corn–soybean meal-based basal diet. Increasing HY levels positively improved body weight, average daily gain, and average daily feed intake (linear effect, p < 0.05). Furthermore, there was a linear increase in N-retention, albumin, jejunal villus height, villus height-to-crypt depth ratio, immunoglobulin A, acetate and propionate production, and Lactobacillus spp. count proportional to the dose of the HY-supplemented diet (p < 0.05). It also observed a decrease in diarrheal rate, jejunal crypt depth, blood urea nitrogen, pro-inflammatory cytokines, branched amino acids, and E. coli corresponding to the HY-supplemented levels (p < 0.05). However, the changes in the apparent total tract digestibility (dry matter, crude ash, and crude fat), blood glucose, butyrate, and Salmonella spp. were unaffected by the dietary HY level. Therefore, the supplementation of HY in the diet for early-weaned pigs not only supported the growth rate and immune function but also activated the beneficial bacterial growth of the early-weaned piglets.