A 60‐day feeding trial was conducted to evaluate the effects of dietary palm oil supplements on growth performances, hematology, liver anti‐oxidative enzymes and air exposure resistance of Japanese flounder, Paralichthys olivaceus (initial weights 2.56 ± 0.01 g). Five diets were tested wherein the dietary fish oil was replaced by palm oil at: 0% (Control), 20% (20%), 40% (40%), 50% (50%) and 60% (60%). After the feeding trial, the 20% dietary palm oil was shown to provide similar growth rates and feed efficiency with no negative effects compared to the control group (P > 0.05). Significantly lower growth rates and feed utilization were found in fish fed higher than 40% palm oil in the diet (P < 0.05). Except for total serum protein, the blood parameters, liver anti‐oxidative enzymes, stress resistance and proximate compositions of Japanese flounder were not altered, even with dietary palm oil up to 60% of the lipid source (P > 0.05). According to the present results, palm oil is a valuable lipid source substitute in Japanese flounder diets; around 20–40% fish oil can be replaced with palm oil with no negative effects.