A 70-days feeding investigation was undertaken to highlight the influence of dietary incorporation with the conventional form of vitamin E (VE) and chitosan vitamin E nanocomposite (CVEN) on different health aspects of Oreochromis niloticus (O. niloticus) reared under different stocking densities. Growth performance, antioxidant status, and immune response were assessed. Fish (n = 405, average weight: 14.74 ± 0.06 g) were randomly assigned into six groups in triplicates. Three experimental diets were used; 1) basal diet with no additives, 2) basal diet +300 mg/kg VE, 3) basal diet +300 mg/kg CVEN, with two stocking densities for each; standard stocking density (SSD) (15 fish/ aquaria) and high stocking density (HSD) (30 fish/ aquaria). Furthermore, a subsequent challenge with pathogenic Aeromonas sobria (A. sobria) was performed at the end of the feeding period. A significant improvement in the final body weight, total weight gain, feed intake, specific growth rate, and average daily weight gain was found in the CVEN group raised under SSD. Vitamin E supplementation, especially the nano form (CVEN), ameliorates the bad effect of high stocking density on fish growth. Marked elevation in the serum level of vitamin E and growth hormone and decreased AST and ALT levels were observed in the CVEN group reared under SSD compared with other groups. An improvement in the serum and hepatic antioxidant activities and the immunological indicators (lysozyme activity, nitric oxide, phagocytic index, and IL-10) was observed in Vitamin E supplemented groups reared under SSD. Supplementation of vitamin E, especially the nano form, improved the serum and hepatic antioxidant enzymes and decreased lipid peroxidation of fish reared under HSD. Increased survivability of fish reared under HSD by CVEN supplementation. Vitamin E supplementation counteracts the negative impact of HSD on the histoarchitecture of the liver. This study suggested that; supplementation of the fish diet with CVEN (300 mg/kg) could promote the growth performance, antioxidant status, immune response, and increase fish tolerance to rearing under HSD. Moreover, dietary supplementation with CVEN enhanced fish resistance to A. sobria infection.