In Mauritius, the sterile insect technique (SIT) is being developed to manage the Peach fruit fly, Bactrocera zonata (Saunders) (Diptera: Tephritidae). Novel and economical larval diets are needed to produce millions of artificially reared sterile flies needed to ensure the success of this programme. We assessed the efficacy of conventional (solid) and gel diets with formulations containing modified waste brewery yeast (WBY), an alternative low cost protein source. The WBY is obtained freely from the manufacturing plant located at the Entomology Division of the Ministry of Agro Industry & Food Security, Réduit, Mauritius. Its chemical composition is highly comparable to those of the imported commercial yeast. Formulations of both diet types varied in the ratio of WBY (%) to commercial yeast (CY) (%) (Control: 0:100, A: 25:75, B: 30:70; C: 40:60; D: 50:50). The quality parameters of flies reared on the modified gel larval diets i.e. volume of pupae, pupal weight, pupal recovery, percentage adult emergence and percentage fliers were comparatively better on the gel diet formulations B, C and D, while no significant difference in percentage egg hatch was observed between the conventional diet and the gel diet. The optimum egg seeding rate (larval density) for selected gel diets B, C and D was determined. Formulation C using 0.15 ml of eggs/100 g of diet resulted in the highest pupal recovery, pupal weight, emergence and flight ability. A five-year cost benefit analysis revealed a net cost saving of 38% (US$ 53 418.20) by using the gel diet with WBY instead of the solid diet. The cost for the production for one million flies is US$ 310.67. Our results demonstrate that the selected gel diet formulation in which commercial yeast is partially replaced by waste brewery yeast is a viable alternative to the conventional solid diet for rearing of B. zonata. There are also the added benefits in terms of reduced cost with respect to storage and disposal, due to the elimination of bulking agents.