Lactose was added (400 g/day, as powder) to a lucerne hay diet (700 g/day, chopped). The two diets (hay and hay with lactose) were fed twice daily, successively, to four adult sheep fitted with rumen cannulas and simple cannulas at the proximal and at the distal end of the small intestine. Organic matter (OM) intake was 544 g/day with hay and 961 g/day with hay and lactose. Addition of lactose increased the proportion of OM that disappeared within the rumen (45.7 vs 38.7%) and within the small intestine (18.3 vs 13.2%), and decreased amounts that disappeared in the large intestine (6.7 vs 9.0%). However, the differences were not significant. Lactose was almost entirely fermented in the rumen, resulting in low pH and high lactate concentration for 3 hr after meals. Mean volatile fatty acid (VFA) concentrations were low (67 mmoles/liter) and unchanged by addition of lactose. Propionate and valerate molar proportions increased and acetate molar proportions decreased with lactose supplementation. Adding large amounts of readily fermentable carbohydrates as lactose greatly altered nitrogen digestion of the lucerne hay in the rumen; supplementation allowed a greater uptake of ammonia for microbial synthesis. Consequently, rumen ammonia levels, blood urea and urinary nitrogen excretion decreased greatly with lactose, from 20.5 mg/100 ml, 20.6 mg/100 ml and 6.96 g/day to 2.3 mg/100 ml, 8.7/100 ml and 2.5 g/day, respectively. The amount of nitrogen flowing into the duodenum increased by 47%, and the amount of nonammonia nitrogen apparently digested within the small intestine by 83%. Nitrogen in feces increased with lactose because of increased microbial nitrogen. Retained nitrogen increased only slightly (from 5.0 to 6.4 g/day) because of the low nitrogen needs of sheep.