Feed rate is one of the important variables considered for the improvement in production of prawns. The effects of four feeding rates on growth, water quality and the nutrient budget of Penaeus latisulcatus were investigated for 98 days. The specific growth rate (SGR) at 3.0% feed rate was significantly higher than at all higher feed rates, and there was no significant difference in SGR between 4.5%, 6% and 7.5%. Total ammonia nitrogen concentrations in all treatments remained low in the safe range for prawn culture. Dissolved inorganic nitrogen and nitrate nitrogen were significantly higher (P < 0.05) in prawn tanks received feed rates of 6.0% and 7.5%. Total phosphorus and the soluble reactive phosphorus linearly increased with the progression of the trial and feeding rates. Nutrient conversion rates were significantly higher (P < 0.05) in prawns receiving the feeding rate of 3.0% than feeding rates of 6.0% and 7.5%. The lowest food conversion ratio was recorded at feeding rates of 3% and 4.5%. Nutrient budget showed that 6.01–15.99% nitrogen and 4.53–9.29% phosphorus of the nutrient inputs were retained in the prawn biomass. The results indicated that the growth and nutrient conversion rate may not increase with the increase above 3.0% of biomass per day.