A feeding trial was conducted to evaluate response of European seabass (ESB, Dicentrarchus labrax) fry to graded levels of the dietary organic salt, sodium butyrate (SB). ESB with 0.45 g were fed four experimental diets contained: 0, 0.1, 0.2 and 0.3% SB and assigned as: control (CTRL), SB1, SB2 and SB3 respectively for 12-weeks. Results showed a significant (P≤0.05) elevation of all measured growth criteria induced by SB2 and SB3 diets intake relative to CTRL diet (SB-free). Both 0.2% and 0.3% dietary SB supplementation had led to appreciable increase in protein concomitant with decrease in lipid contents of fish, as well as enhancement of fish hematological profile. All measured immunological parameters in fish serum have remarkably increased: immunoglobulin (+198%), respiratory burst activity (+78.2%), phagocytosis (+42.3%), myeloperoxidase (+42.2%), lysozyme (+10.6%) and bactericidal (42.8%) activities with the oral-ingestion of SB, particularly at 0.2% then 0.3% level in comparison to CTRL. Besides, SB can maintain a healthy balance of bacterial load in the gut through boosting beneficial bacteria and inhibiting pathogens within the distal intestine, thereby modulate and stimulate immunity response of fish. Records of intestinal sections-measurement emphasized the positive effects of SB2 diet on the intestinal lumen causing activation in the development of muscle layers-thickness, goblet cells count and villi length and width of fish. These results evidenced the advantageous effect of SB on gut-health functionality, leading to higher capacity of disease resistance and growth rate for ESB fry. In conclusion, our findings indicate that inclusion of 2g micro-encapsulated SB/Kg diet could provide a safer potent alternative to antibiotic use, to benefit health status, reinforce immunity response, modulate the distal-intestine microbiota and increase cell-proliferation in the intestinal crypts of ESB fry.