Finding eco-friendly alternatives for antibiotics in treating bacterial diseases affecting the aquaculture sector is essential. Herbal plants are promising alternatives, especially when combined with nanomaterials. Neem (Azadirachta indica) leaves extract was synthesized using a chitosan nanocapsule. Chitosan neem nanocapsule (CNNC) was tested in-vitro and in-vivo against the Aeromonas sobria (A. sobria) challenge in Nile tilapia. A preliminary experiment with 120 Nile tilapia was conducted to determine the therapeutic dose of CNNC, which was established to be 1 mg/L. A treatment study was applied for seven days using 200 fish categorized into four groups (10 fish/replicate: 50 fish/group). The first (control) and second (CNNC) groups were treated with 0 and 1 mg/L CNNC in water without being challenged. The third (A. sobria) and fourth (CNNC + A. sobria) groups were treated with 0 and 1 mg/L CNNC, respectively, and challenged with A. sobria (1 × 107 CFU/mL). Interestingly, CNNC had an in-vitro antibacterial activity against A. sobria; the minimum inhibitory concentration and minimum bactericidal concentration of CNNC against A. sobria were 6.25 and 12.5 mg/mL, respectively. A. sobria challenge caused behavioral alterations, skin hemorrhage, fin rot, and reduced survivability (60%). The infected fish suffered a noticeable elevation in the malondialdehyde level and hepato-renal function markers (aspartate aminotransferase, alanine aminotransferase, and creatinine). Moreover, a clear depletion in the level of the antioxidant and immune indicators (catalase, reduced glutathione, lysozymes, nitric oxide, and complement 3) was obvious in the A. sobria group. Treatment of the A. sobria-challenged fish with 1 mg/L CNNC recovered these parameters and enhanced fishsurvivability. Overall, CNNC can be used as a new versatile tool at 1 mg/L as a water treatment for combating the A. sobria challenge for sustainable aquaculture production.