The objective of this study was to determine the effect of acetylated peptides on rumen fermentation and nitrogen metabolism in sheep. Six adult Poll × Dorset crossbred sheep, fitted with permanent rumen and duodenal fistulas, were used in a replicated 3×3 Latin design experiment. Three basic diets, balanced to similar nitrogen intake, were supplemented with 100 g soyabean meal (SBM), 60 g soyabean peptides (SBP) or 80 g acetylated soyabean peptides (ASP), respectively. The crude protein of soyabean peptides and acetylated peptides powder were 66.8 and 51.0%. The degree of acetylation was 88.9%. Soyabean peptides had the highest rumen pH (6.94), followed by ASP and SBM (6.74 and 6.58; P<0.05). Ruminal ammonia was also affected by treatment (8.05 and 10.18 mg/dl for ASP and SBP, respectively; P<0.05). Blood urea nitrogen of the SBM diet showed a higher value compared with SBP and ASP (5.96, 4.14 and 2.90 mmol/l; P<0.05). Apparent nitrogen digestibility of ASP (73.51%) was significantly higher than that of SBM (62.85%; P<0.05).