Two consecutive experiments were conducted to study the effects of stocking density on growth, food utilization, production and farming profitability of Nile tilapia (Oreochromis niloticus) fingerlings (initial mean weight: 16.2 ± 0.2 g) fed Azolla, as a main component in diet. In experiment 1, fish were hand-fed twice daily with three isonitrogenous (28.5% crude protein) and isocaloric (14.5 kJ g-1) diets A30, A35 and A40 containing 30%, 35% and 40% Azolla, respectively, for 90 days. Diets were formulated by mixing Azolla with locally available by-products. No significant differences were found in growth parameters and production (P>0.05). Total investment cost was significantly higher with A30 (P0.05). In experiment 2, three stocking densities, 1, 3 and 5 m-2, were assigned to three treatments T1, T2 and T3 respectively. Fish were hand-fed twice daily with diet A40. The final mean weight (89.53-115.12 g), the mean weight gain (0.81-1.10 g day-1), the specific growth rate (1.90-2.20% day -1) and the apparent food conversion ratio (1.29-1.58) were affected by stocking density, with significant difference (P-2, compared with the other densities. Stocking density did not affect survival rate (P>0.05). Yield and annual production increased with increasing stocking density, ranging from 7.10 ± 0.90 to 25.01 ± 1.84 kg are-1 and 28.79 ± 3.66 to 101.42 ± 7.48 kg are-1 year-1, respectively, with significant differences between all densities (P-2 produced the same profitability values. On the basis of growth values and economic return, it was concluded that Nile tilapia could be raised at a density of 3 fish m -2 with A40 to improve production and generate profit for nutritional security and poverty alleviation in rural areas. © 2007 Blackwell Publishing Ltd.