The future of aquaculture development is directed toward high intensification to overcome the decline in natural fishing and to provide enough protein for the increasing world population. The spread of aquaculture production and intensification requires the search for high-quality, new efficient feed ingredients with low cost and sustainable importance. Therefore, the current study aimed to detect the effects of partial or total replacement of fishmeal with amphipod meal, Gammarus pulex, on growth performance, survival percent, feed utilization, histological alteration of intestine and liver, and economic yield of grey mullet, Mugil cephalus, fry. Five diets were formulated to contain 100% fishmeal (FM), or FM replaced with 25%, 50%, 75%, or 100% amphipod meal (APM) (D0, D25, D50, D75, and D100, respectively). A total of 300 grey mullet fry (0.097 ± 0.001 g), were divided into five groups (three replicates each) at an initial stocking density of 20 fry per aquaria (100 L). The aquarium’s water is renewed at a rate of 30% daily. During a 60-day experimental period, the feeding rate was 20% of body weight, which was introduced as five meals per day. Fish fed D50 achieved the highest significant values of final weight (1.80 g), weight gain (1.70 g), survival (86.67%), final length (4.47 cm), and length gain (2.06 cm). In addition, the feed utilization of diets containing increasing substitution levels of FM showed that the highest protein intake (0.82 g ish−1), protein efficiency ratio (0.83), protein productive value (30.65%), and the lowest significant feed conversion ratio (1.21) were recorded with D50. The dose-response study revealed that the best substitution levels could range between 50% and 75%. Histological observations confirmed that the highest number of goblet cells and intestinal villi were recorded in the group fed D50. No pathological effect was observed in the liver at all substitution levels. In terms of economic efficiency, the best economic conversion ratio was recorded in the group fed D50. This study confirmed that 50% partial substitution of FM with APM is the ideal replacement level for grey mullet fry. In addition, the use of a new renewable alternative, such as APM to substitute FM, could relieve the pressure on the capture of wild fish and reduce the environmental impact of inland aquaculture.