Two trials were conducted to evaluate effects of dietary potassium (K) concentration and lasalocid (L) in lamb finishing diets. Treatments were arranged in a 2 X 2 factorial and consisted of a 65% concentrate diet with 1.1% K (C), .9% K + 21.3 mg L/kg (CL), 2.1% K (P) and 2.5% K + 20 mg L/kg (PL). In trial 1, 64 fine-wool lambs (initial wt 35.3 kg) were randomly assigned to the four treatments (two pens of four wethers and four ewes/treatment) for a 56-d feeding trial. Average daily gain was not affected by K, but was increased (P less than .10) by L (.23 vs .26 kg/d). Lasalocid tended (P less than .20) to improve feed:gain ratio (5.6 vs 6.3). A K X L interaction (P less than .06) was noted for feed intake, with values of 1.37, 1.45, 1.49 and 1.51 kg X head-1 X d-1 for the C, CL, P and PL groups, respectively. In trial 2, 16 wether lambs (four/treatment fed at 2% of body weight) were used in a site and extent of digestion and nitrogen (N) balance trial, using the same four diets as in trial 1. Site of digestion was estimated from abomasal samples taken at slaughter, with indigestible acid detergent fiber as a marker. Total tract organic matter digestibility was increased (P less than .05) with added K (80.1 vs 76.4%) and L (80 vs 76.4%). Ruminal starch digestibility was not affected by added K, but was decreased (P less than .10) by added L (71.8 vs 88.2%).(ABSTRACT TRUNCATED AT 250 WORDS)