This experiment was carried out to assess the effect of tannins content and biological activity of leucaena (Leucaena leucocephala) on in vivo total tract apparent digestibility, nitrogen balance, ruminal fermentation and methane emission. Six adult rumen cannulated Santa Inês sheep (70 ± 2.5 kg of BW) adapted to the basal diet (70% Tifton hay (Cynodon. spp.) + 21% ground corn, 9% soybean meal) were individually divided into three experimental diets completing a double latin square design (3 treatments, 3 periods, 6 animals). For 17 d (10 d adaptation and 7 d data collection period), the animals were fed ad libitum, one of the following diets: control (CNTRL-basal diet only), leucaena diet (LEUC-123 and 8.8 g/kg DM of total tannins and condensed tannins respectively), which consisted of the basal diet replaced by 0.50 of Tifton hay with leucaena and the leucaena diet plus 20 g/day/animal of polyethylene glycol (LPEG). Leucaena shade dried was ground before being thoroughly mixed with required quantity of concentrate and Tifton. The LEUC either with or without PEG increased the DM intake (P=0.009) and nitrogen intake (P=0.005) compared with CNTRL. Although apparent total-tract digestibilities of DM, OM, CP, NDF, and EE were not different (P>0.05) among the dietary treatments, LEUC decreased (P= 0.0009) ADF and tended to decrease (P=0.086) the CP digestibility compared with the CNTRL. These reduction were associated with rumen NH 3-N reduction (P<0.0001) compared with LPEG. Leucaena diets (LEUC and LPEG) improved (P=0.012) N retention compared with the CNTR and decreased (P<0.0001) the CH 4 emission per kg digested OM by 14 and 11%, respectively as well as decreased (P<0.0001) the C2/C3 ratio compared with CNTRL. However, LPEG improved (P=0.012) the acetate and butyrate (P=0.0034) compared with the LEUC. These findings highlight not only the nutritional value of leucaena diet but also the potential for mitigating methane emission and urinary nitrogen execration by sheep.