The present study was conducted to evaluate the individual and combined effects of dietary crude protein levels and magnetic water treatment on the growth performance, water quality, body composition, physiological responses, and immunity of Oreochromis niloticus. Using a 3 × 2 factorial design, three levels of dietary crude protein (25%, 30%, and 35%) and two water types (magnetized and non-magnetized) were tested. A total of 180 juvenile tilapia (average initial weight: 4.13 ± 0.004 g) were randomly assigned to six treatment groups and reared for 10 weeks. Results showed that magnetic water treatment significantly improved dissolved oxygen and pH, while reducing ammonia, nitrite, and nitrate concentrations. Growth performance indicators, including final weight, specific growth rate, feed conversion ratio, and average daily gain, were significantly improved by both magnetic water and increased dietary protein. Carcass crude protein content improved with both the higher dietary protein level and magnetic water, while lipid content decreased. Liver and kidney function indicators (AST, ALT, ALP, and urea) were significantly improved by magnetic treatment and higher protein levels. Blood biochemical markers (TP, ALB, and GLO) were elevated, while glucose, cholesterol, and triglycerides were reduced by magnetic water; significant interactions were observed for globulin, triglycerides, and total protein. Antioxidant enzyme activities (SOD, CAT, and GPx) increased, and MDA decreased in response to magnetic water and high-protein diets. Similarly, digestive enzyme activities (lipase, protease, and amylase) and immune parameters (IgM and lysozyme) were significantly improved, with the best values recorded in the 35% protein + magnetic water group. In conclusion, magnetic water treatment and dietary protein level independently and interactively affect the physiological performance and health of Nile tilapia, with the best outcomes obtained at 35% protein under magnetic water conditions.