Globally, growing demand for animal-based food could be met through livestock intensification. However, intensive systems raise concerns about animal welfare and limitations associated with the sustainability of input use. Insect meal shows great potential as a protein source for ruminants, particularly as a substitute for soybean expeller. This study investigates alternative, environmentally sustainable feed sources for sheep, with the aim of evaluating the effects of replacing soybean expeller with black soldier fly larvae (BSFL) meal on key indicators, including animal performance, ruminal fermentation profiles, and animal welfare during the fattening phase of Merino lambs. To this end, Merino lambs were fattened for 50 days with two diets: soybean expeller (S) and insect meal (IM). Animal performance was measured by individual body weight, body condition score, feed intake, average daily gain, and feed conversion ratio. Animal welfare was evaluated using hematological parameters as stress indicators, including glucose levels, cortisol levels, and total protein concentrations. At the end of the experiment, rumen fluid was sampled and analyzed. No significant differences between diets were found in productive performance, ruminal fermentation, or stress indicators of Merino lambs, suggesting that BSFL meal could be a viable and competitive alternative. These results highlight the potential of IM as a sustainable alternative feed ingredient for ruminants.