In the recent decades, air and surface water pollution by nitrogen from agro-industrial discards has become a global environmental concern. Generally, these byproducts and or discards are nutrient rich and could inexpensively be utilized for various purposes marginally helping with mitigation strategies. In this context, our study was conducted in two phases: producing lactosylurea from agro-industrial by-products and subsequently evaluating the possibility of using lactosylurea as a non-protein nitrogen source in the ruminant’s diet and its effect on feed digestibility as well as ruminal parameters. Gas production test and in-vitro disappearance method were used to describe the kinetics of digestion in both dry matter (DM) and crude protein (CP) of the four experimental treatments. Protozoa count and total volatile fatty acids concentration were utilized to evaluate the ruminal parameters. The treatments were 1) basal diet + urea (BDU), 2) basal diet+ lactosylurea (BDL), 3) basal diet+ concentrated lactosylurea (BDCL), 4) basal diet+ Optigen (slow release NPN) (BDO). According to our findings, produced gas, DM, and CP disappearance in were significantly higher in concentrated lactosylurea and positive control groups than the other treatments (P<0.05). Moreover, estimated metabolizable energy, digestible organic matter and short chain fatty Acid were significantly higher for the same treatments (P<0.05). The values for protozoa count (2.66×106 organism/ml) and total volatile fatty acids concentration (30.96 mmol/L) were significantly lower and for urea treatment compared with others (P<0.05). In conclusion, lactosylurea as agro-industrial by-products can be a good alternative for urea or Optigen to reduce environmental contamination.