Twelve ruminally and abomasally cannulated lambs (27 +/- 1.16 kg) and 16 intact lambs (28 +/- 1.49 kg) were used in two trials to study the influence of dairy biomass (a cheese processing wash water sludge) as a protein source in medium-concentrate diets. In Trials 1 and 2, lambs were assigned to one of three concentrate diets containing 0, 10 or 20% biomass with an additional positive control diet in Trial 2. Biomass provided 27.4 and 52.7% of the CP in 10 and 20% biomass treatments, respectively. Diets were similar in N content and were fed at 3.5% of initial BW (as fed). Apparent ruminal OM and N digestibilities were lower (P less than .10) in lambs receiving 20% biomass than in lambs fed 0 or 10% biomass. Postruminal N digestibility was higher (P less than .10) for lambs fed 20% biomass. Apparent OM and N digestibilities in both trials were reduced (P less than .10) in lambs fed 20% biomass. Apparent OM and N digestibilities in both trials were reduced (P less than .10) in lambs receiving 10% biomass compared to lambs fed other treatments. Plasma urea N concentration (mg/dl) was higher (P less than .10) at 3 and 9 h after feeding in lambs receiving 10 and 20% biomass compared with control lambs. Although N retention was unchanged, fecal N excretion was higher (P less than .10) and urinary N excretion was lower (P less than .10) in lambs consuming 10 and 20% biomass treatments. Non-ammonia N and feed N flow (g/d) were higher (P less than .10) in abomasal contents of lambs consuming 20% biomass vs other dietary treatments but N digestibility was decreased. In conclusion, digestibility was decreased and site of N digestion was altered by feeding biomass.