Understanding the molecular mechanisms involved in adaptation to alternate diets has become a significant concern, as increasing amounts of fishmeal (FM) protein in aquafeeds are being substituted with plant protein. Thus, the goal of this study was to assess growth performance, quality, and liver function of juvenile Sillago sihama (S. sihama) through growth indices, whole-body composition, histology of the liver, and RNA-sequencing (RNA-seq), after they were fed a formulated diet with 64% low-gossypol cottonseed meal (LCSM) for 56 days, compared to those fed a traditional FM-based diet. Indicators of growth, including final body weight (FBW), weight gain rate (WGR), specific growth rate (SGR), protein efficiency ratio (PER), and condition factor (CF), were considerably lower in the 64% LCSM (R64) group than in the FM diet group. In the R64 diet, the whole crude lipid was significantly lower than in the FM diet. The hematoxylin–eosin section showed that dietary high levels of LCSM resulted in diffuse lipid vacuolation in the liver of S. sihama. According to a liver transcriptome analysis, high LCSM intake in the diet significantly impacted lipid synthesis and catabolism, elevated pathways for cholesterol synthesis, blocked several amino acid metabolic pathways, and adversely affected hepatic gluconeogenesis and glycolysis. The findings of this study indicate that feeding high levels of LCSM in S. sihama is harmful to the growth of the organism and can harm the liver’s structural integrity, as well as obstruct the normal metabolism of amino acids, lipids, and carbohydrates. Therefore, it is not recommended to substitute LCSM for high levels of FM in the diet of S. sihama.