We compared the utilization efficiency of free lysine (FL) and dipeptide lysine-glycine (LG) in terms of growth performance and whole-body amino acid composition in olive flounder Paralichthys olivaceus. A basal experimental diet was formulated to contain 0.5% (basal) lysine from fish meal, and four other diets were prepared by supplementing 0.5% or 1.0% of either FL or LG. The experiment was performed in triplicate, and 20 randomly selected fish averaging $5.41{pm}0.16g$ were fed one of the test diets at the rate of 3% BW/day twice daily for 6 weeks. At the end of the feeding trial, fish fed the basal diet showed significantly less weight gain than did the other groups. The results of a two-way ANOVA showed that both lysine level (P = 0.001) and type (P = 0.034) influenced growth rate; however, we found no significant interaction between lysine level and form (P > 0.05). Our results revealed a significant improvement in protein efficiency ratio (PER) with each increment of dietary lysine, and the groups fed LG-supplemented diets showed higher PER than did those offered FL. Hepatosomatic and viscerosomatic indices were significantly influenced by lysine level and form, and higher values were recorded in fish fed diets containing LG. Significantly higher whole-body arginine levels were found in LG-fed groups, and a significant interaction was observed between lysine level and form (P = 0.009). Whole-body valine and aspartic acid contents were affected by lysine level, and alanine concentration was influenced by both lysine level and form. Our findings indicate that juvenile olive flounder can utilize LG more efficiently than FL for protein synthesis.