Over the past few years, air and surface water pollution with nitrogen from agro-industrial waste has become a global environmental concern. Generally, these discards have nutritional value and could be utilised inexpensively for various purposes. The study involved two different phases: 1) production of lactosylurea from agro-industrial by-products and 2) evaluation of the nutritive value of lactosylurea as a non-protein nitrogen source in the ruminant diet, including its effect on feed digestibility and ruminal parameters. The gas production test and in vitro disappearance method were used to describe the digestion kinetics of both dry matter (DM) and crude protein (CP) in the four experimental treatments. Protozoan count and total volatile fatty acid concentration were utilised to evaluate ruminal parameters. The treatments were as follows: 1) basal diet + urea (BDU), 2) basal diet + lactosylurea (BDL), 3) basal diet + concentrated lactosylurea (BDCL), 4) basal diet + slow-release non-protein nitrogen (Optigen) (BDO). According to our findings, gas produced, DM, and CP disappearance were significantly higher in the BDCL and BDO experimental treatments than in the other treatments (P < 0.05). Moreover, estimated levels of metabolisable energy, digestible organic matter and short chain fatty acids were significantly higher for the same treatments (P < 0.05). The number of protozoa (2.66 × 106 organism/ml) and total volatile fatty acid concentration (30.96 mmol/l) were significantly lower in urea treatment compared to others (P < 0.05). In conclusion, lactosylurea produced from agro-industrial by-products seems to be a good alternative for urea or Optigen that additionally reduces environmental contamination by agro-industrial waste.