Proteases are the enzymes responsible for the hydrolysis of complex proteins into simpler units for better digestion and absorption of nutrients. This study was conducted to determine the optimum supplementation level and effects of dietary protease addition in poultry by‐product meal‐based diet (PBM) on growth performance, nutrient digestibility, digestive enzyme activities and physiochemical parameters of juvenile rohu, Labeo rohita (initial weight: 11.33 ± 0.02 g). For this purpose, seven iso‐nitrogenous and iso‐lipidic experimental diets were formulated to contain a positive control (PC) diet (containing fishmeal and no protease), a negative control (NC) diet (containing PBM and no protease) and five other PBM‐based diets supplemented with exogenous protease at the levels of 150, 300, 450, 600 and 750 mg/kg diet. Results indicated that growth performance and body indices of fish fed protease supplemented diets were higher (p < 0.05) compared with those fed the NC diet, while maximum increase was recorded at 450 mg/kg protease supplementation level, which was similar to the PC diet (p > 0.05). Protease supplementation up to 450 mg/kg level linearly improved (p < 0.05) the whole‐body proximate composition and digestibility of dry matter (DM), crude protein (CP), crude lipid (CL) and crude ash (CA) in rohu juveniles. A similar trend (p < 0.05) was observed in the activities of amylases, lipases and proteases in intestinal and hepatopancreatic tissues, peaking at 450 mg/kg which was also similar (p > 0.05) to the PC diet. Protease supplementation significantly improved (p < 0.05) haemoglobin (Hb), haematocrit (Htc) and red blood cells (RBCs) of juveniles while, white blood cells (WBCs) and serum indices remained unaffected (p > 0.05). Based on quadratic regression analysis, the optimal dietary protease supplementation in PBM‐based diet for rohu was 433 mg/kg. Conclusively, increase in protease supplementation from 0 to 450 mg/kg levels improved the fish performance and decreased thereafter with further increase in protease levels (600–750 mg/kg).