An assessment of the nutritive value of palm kernel meal (PKM) and aflatoxin-contaminated PKM (obtained by fermenting PKM with Aspergillus flavus) as a dietary ingredient in pelleted feed for tilapia, Oreochromis mossambicus Peters, was carried out in a 12-week feeding trial. Seven isonitrogenous (40% crude protein) and isoenergetic (15.1 kJ g−1) practical diets were formulated and fed close to apparent satiation to triplicate groups of 12 fish (mean initial weight 8.4 ± 0.1 g). The control diet contained 30% fish meal and 10% soybean meal (SBM) proteins. Four other experimental diets containing 20% and 50% of the SBM protein replaced by either PKM or fermented PKM, respectively, were formulated. Two additional diets containing either PKM or fermented PKM supplemented with a commercial aflatoxin adsorber (0.5% SorbatoxTM) were also formulated. Measured aflatoxin B1 levels in the fermented PKM-based diets ranged from 75 to 100 µg kg−1 diet. The growth performance and feed utilization efficiency of tilapia fed fermented PKM-based diets were significantly lower than in fish fed the control diet at all inclusion levels (P < 0.05). Despite a small reduction, weight gains of tilapia fed PKM-based diets were not significantly different compared with fish fed the control diet. The addition of 0.5% Sorbatox did not produce any beneficial or negative effects to the growth of tilapia. Under the dietary conditions of the present experiment, it was concluded that PKM can substitute up to 50% SBM in practical diets for O. mossambicus without much adverse effect to fish growth. However, when PKM was contaminated with A. flavus, its' incorporation into tilapia diets resulted in growth depression as a result of decreased diet digestibility and also possibly because of the presence of anti-nutrients found in the contaminated PKM.