We hypothesized that microbial efficiency and output from fermentation in the rumen would be optimized when peptide supply was balanced with peptide requirement of ruminal microflora. This study was conducted to measure response of varying rumen degradable peptide (RDPep) supply on ruminal fermentation characteristics and steer growth. A continuous culture experiment was conducted with diets formulated to achieve a predicted RDPep balance (RDPep supplied above RDPep required) of -0.30 to 1.45% CP with rumen degradable N (RDN) balance (RDN supplied above RDN required) above dietary ammonia-N requirement of microbes. Two additional treatments had RDPep balances of -0.30 and 0.78% CP with insufficient ammonia-N supply to meet microbial requirements. Single-flow fermenters (N = 24; n = 6) were inoculated with rumen fluid and maintained anaerobically at 39°C with a 0.06 h(-1) dilution rate. Inadequate RDN decreased OM digestion and microbial N flow, and increased rumen undegradable N (P < 0.01). Microbial efficiency decreased in RDN-deficient diets and was greatest when RDPep balance did not excessively exceed microbial requirement of RDPep predicted (P < 0.01). A growth study was conducted with 49 yearling, crossbred, Angus steers (initial BW 370 ± 34 kg). Animals were assigned to 1 of 4 treatment groups by BW and further divided into 3 pens with 4 steers per pen to achieve similar initial pen weights. Treatments consisted of 4 isonitrogenous diets balanced for RDN but varying in predicted RDPep balance (0.55%, -0.02%, -0.25%, and -0.65% CP). Animals were maintained on treatment for 70 d with individual BW taken on d 0, 1, 21, 42, 70, and 71. Final BW decreased linearly with decreasing RDPep (P = 0.05). Average daily gain and G:F displayed a quadratic effect with greater ADG and G:F at greater and lesser RDPep levels (P = 0.02). We concluded that balancing RDPep supply to predicted requirement improved fermentation efficiency and microbial output, which in turn improved animal performance.