A metabolism study and two feedlot trials were conducted to evaluate urea supplementation of peanut skin (PS) diets and ammoniation of PS as methods of reducing detrimental effects of tannins in PS on nutrient digestibility and performance of beef cattle. Tannin content of PS was reduced by 42% after ammoniation. Digestibility coefficients for dry matter, crude protein, nitrogen free extract, energy and total digestible nutrients were higher (P less than .05) for the control diet without PS compared with urea-supplemented PS (UPS) and ammoniated PS (APS) diets. Ether extract digestibility was higher (P less than .05) for UPS and APS diets compared with the control diet. Fecal N was higher (P less than .05) and N retention was lower (P less than .05) in steers fed UPS and APS diets compared with controls, which suggested that in UPS and APS diets dietary protein was being complexed with tannins and excreted. Steers fed the APS diet had lower (P less than .05) plasma urea nitrogen compared with control and UPS diets at 2, 4 and 6 h post-feeding. Eighteen heifers were fed control, UPS and APS diets individually for 84 d, resulting in similar (P less than .05) feedlot performance and carcass traits for heifers on all dietary treatments. Rumen fluid propionic acid levels were similar for control and APS heifers and somewhat lower (P greater than .05) for UPS heifers at 3 and 6 h post-feeding on d 62 of the trial. The experimental diets were fed to 54 steers (360 kg initial wt) ad libitum. After 98 d on dietary treatments average daily gains (ADG), final weights, carcass weights and carcass quality grades were not different (P greater than .05) for control and APS steers. Live weight and ADG were lower (P less than .05) for UPS steers on d 98 compared with control and APS steers, and UPS steers continued in the feedlot through d 147. After 98 d on control or APS diets 72.2% of the beef carcasses produced on each diet graded USDA Choice, and 100% of the carcasses of steers fed UPS graded USDA Choice after 147 d. A urea-supplemented PS diet or a diet containing ammoniated PS was ineffective in improving digestibility and N retention of PS diets when limit-fed to steers. However, ad libitum feeding of an ammoniated PS diet was effective in overcoming detrimental effects of tannins on feedlot performance of heifers and steers.