Many metabolic diseases in fish are often associated with lowered peroxisomal fatty acid (FA) β-oxidation. However, the physiological role of peroxisomal FA oxidation in lipid metabolism in fish still remains unclear. In the present study, a specific peroxisomal FA β-oxidation inhibitor, 10,12-tricosadiynoic acid (TDYA), was used to investigate the effects of impaired peroxisomal β-oxidation on growth performance, health status, and lipid metabolism in Nile tilapia. The results showed that the dietary TDYA treatment did not affect weight gain, but significantly decreased peroxisomal β-oxidation in the liver, and increased body fat accumulation. The fish with impaired peroxisomal β-oxidation exhibited higher contents of serum lipid and peroxidation products, and alanine aminotransferase activity, and significantly lowered hepatic activities of superoxide dismutase and catalase. The inhibited peroxisomal β-oxidation did not enhance mitochondrial β-oxidation activity, but compensatorily upregulated FA β-oxidation-related gene expression, and downregulated the gene expressions in lipolysis and lipogenesis. Taken together, TDYA treatment markedly induced lipid accumulation and hepatic oxidative damage via systemically depressing lipid catabolism and antioxidant capacity. Our findings reveal the pivotal roles of peroxisomal β-oxidation in maintaining health and lipid homeostasis in fish, and could be helpful in understanding metabolic diseases in fish.