Parasitic infection is a major problem of intensive fish farming in present‐days. Hole in the head is a very common disease occurred in both freshwater and ornamental fish families, which is mainly caused by the infection of a flagellated protozoan of Hexamitadae family. The use of biologically active pharmaceuticals for the treatment of this disease is gradually decreased due to the major issue of bioaccumulation of these chemical compounds in the environment. Our current study shows an effective way to treat the disease by using leaf powder of medicinal plant neem (Azadirachta indica). To assess the therapeutic dose, 96 hr LC₅₀ value of neem leaf powder on Anabas testudineus was found 6.2 g/L. The treatment with neem leaf powder healed the wound region of infected fish and improved fish health efficiently. After treatment, the blood cell counts were significantly increased. Improvement in the liver histopathology was observed in the treated groups. We also found the reduced level of MDA, which is an oxidative stress biomarker after treatment. The hepatic activity of CAT, SOD and GPx was also increased in treated groups. Therefore, our study introduces a very effective way to treat hole‐in‐the‐head disease in Anabas testudineus by nonhazardous neem leaf powder in fish culture.