An 8-week growth trial was conducted to evaluate the effects of dietary arginine (Arg) levels on growth, gut morphology, oxidation resistance and immunity of hybrid grouper (Epinephelus fuscoguttatus♀×Epinephelus lanceolatus♂) juveniles. Seven isoenergetic (1465 kJ (350 kcal)/100-g DM), isoproteic (53·5 % of DM) and isolipidic (7 % of DM) experimental diets were formulated to contain graded Arg levels ranging from 1·9 to 4·7 % (dry weight) at approximately 0·5 % increments. Each diet was randomly assigned to triplicate groups of 16 juvenile fish (average initial body weight: 11·7 (sd 0·1) g) and was administered twice daily (08.00 and 16.00 hours). After the growth trial, all remaining fish were fed their prescribed diets for 2 d and then exposed to 4·5 mg Cu2+/l water for 36 h. Results showed that growth performance and feed utilisation of experimental fish were significantly affected by different dietary Arg levels. Weight gain % (WG%) of fish was increased as dietary Arg increased, reaching a peak value at 3·8 % dietary Arg level, and when dietary Arg level increased to 4·7 % WG% was reduced. Fish fed 1·9 and 2·2 % dietary Arg levels had higher daily feed intake compared with fish fed other dietary Arg levels. Feed conversion ratios in fish fed 1·9, 2·2, 2·7 and 4·7 % dietary Arg levels were higher than those in fish fed 3·1, 3·8 and 4·1 % dietary Arg levels. Protein efficiency ratio and protein productive value (PPV) increased with an increase in dietary Arg, up to a peak value at 3·8 % dietary Arg level, above which these parameters declined. On the basis of quadratic regression analysis of weight gain % (WG%) or PPV against dietary Arg levels, the optimal dietary Arg requirement for hybrid grouper was estimated to be 3·65 %. Fish fed 3·8 % dietary Arg had higher whole-body and muscle protein contents compared with fish fed other dietary Arg levels. Fish fed 3·8 and 4·1 % dietary Arg levels had higher levels of mRNA for insulin-like growth factor-I and target of rapamycin in the liver compared with fish fed other dietary Arg levels. Hepatic S6 kinase 1 mRNA expression in fish fed 3·8 % dietary Arg level was higher than that in fish fed any of the other dietary Arg levels. Gut morphology, hepatic antioxidant indices and immune indices in serum and head kidney were significantly influenced by dietary Arg levels. In conclusion, the optimal dietary Arg requirement for hybrid grouper was estimated to be 3·65 %, and suitable dietary Arg supplementations improved gut morphology and oxidation resistance of hybrid grouper.