Concentrated separator by-product (CSB) is produced when beet molasses goes through an industrial desugaring process. To investigate the nutritional value of CSB as a supplement for grass hay diets (12.5% CP; DM basis), 4 ruminally and duodenally cannulated beef steers (332 +/- 2.3 kg) were used in a 4 x 4 Latin square with a 2 x 2 factorial arrangement of treatments. Factors were intake level: ad libitum (AL) vs. restricted (RE; 1.25% of BW, DM basis) and dietary CSB addition (0 vs. 10%; DM basis). Experimental periods were 21 d in length, with the last 7 d used for collections. By design, intakes of both DM and OM (g/kg of BW) were greater (P < 0.01; 18.8 vs. 13.1 +/- 0.69 and 16.8 vs. 11.7 +/- 0.62, respectively) for animals consuming AL compared with RE diets. Main effect means for intake were not affected by CSB (P = 0.59). However, within AL-fed steers, CSB tended (P = 0.12) to improve DMI (6,018 vs. 6,585 +/- 185 g for 0 and 10% CSB, respectively). Feeding CSB resulted in similar total tract DM and OM digestion compared with controls (P = 0.50 and 0.87, respectively). There were no effects of CSB on apparent total tract NDF (P = 0.27) or ADF (P = 0.35) digestion; however, apparent N absorption increased (P = 0.10) with CSB addition. Total tract NDF, ADF, or N digestion coefficients were not different between AL- and RE-fed steers. Nitrogen intake (P = 0.02), total duodenal N flow (P = 0.02), and feed N escaping to the small intestine (P = 0.02) were increased with CSB addition. Microbial efficiency was unaffected by treatment (P = 0.17). Supplementation with CSB increased the rate of DM disappearance (P = 0.001; 4.9 vs. 6.9 +/- 0.33 %/h). Restricted intake increased the rate of in situ DM disappearance (P = 0.03; 6.4 vs. 5.3 +/- 0.33 %/h) compared with AL-fed steers. Ruminal DM fill was greater (P = 0.01) in AL compared with RE. Total VFA concentrations were greater (P = 0.04) for CSB compared with controls; however, ammonia concentrations were reduced (P = 0.03) with CSB addition. At different levels of dietary intake, supplementing medium-quality forage with 10% CSB increased N intake, small intestinal protein supply, and total ruminal VFA.