Chlorella vulgaris (C. vulgaris) powder is a novel non-grain single-cell protein with enormous potential to be a protein source. However, it is poorly studied in aquatic animals. The purpose of the present study was to explore the optimum replacement ratio of C. vulgaris powder and the influence of the substitution of soybean meal with C. vulgaris on grass carp (Ctenopharyngodon idella) in terms of growth performance, intestinal integrity and the microbial community. Five isonitrogenous and isolipidic diets were formulated by replacing 0% (SM, containing 30% soybean meal), 25% (X25), 50% (X50), 75% (X75) and 100% (X100) soybean meal with C. vulgaris. The feeding trial period lasted 8 weeks. At the end of the experimental trial, the X50 group showed higher FW, WGR and PER than the SM group (p < 0.05). The feed conversion ratio (FCR) of the X50 group was significantly lower than that of the SM group (p < 0.05). The X50 group showed the highest value of the goblet cell number, intestinal amylase and trypsin activities when compared with the SM group (p < 0.05). Replacing 50% soybean meal with C. vulgaris improved the intestinal barrier integrity, as evidenced by upregulating zo-1, zo-2 and occluding transcript (p < 0.05), and alleviated oxidative stress by an increased SOD enzymatic activity and transcript level, probably mediated through the Nrf2-keap1 signaling pathway (p < 0.05). Meanwhile, the X50 group enhanced intestinal immunity, as manifested by increased ACP and LZM activities (p < 0.05), and downregulated the tlr-4, tlr-7, tlr-8 and il-6 through the tlr pathway (p < 0.05). The functionally predicting pathways related to the nitrate respiration and nitrogen respiration were observably activated in the X50 group (p < 0.05). The X50 group improved the biological barrier, as manifested by increased Firmicutes and Rhodobacter (p < 0.05). In conclusion, dietary C. vulgaris powder could promote the growth performance of grass carp by restoring intestinal morphology, increasing digestive enzyme activities, improving antioxidant properties and immunity and optimizing the microflora structure. A C. vulgaris powder replacement of 50% soybean meal was recommended as feed for grass carp.