The effect of alkali-treated bagacillo in diets varying in proportion of bagacillo and molasses was studied in lambs. The bagacillo was treated with a concentrated solution of NaOH in a horizontal drum-type mixer to give a final concentration of 6% NaOH in the processed material with a 20% moisture content. ADG and feed efficiency were higher on the treated than on the untreated bagacillo diets. For all cell wall constituents, especially hemicellulose, digestibility was greater for the NaOH-treated when compared with the untreated bagacillo diets. Lambs fed the treated diets also had an increased N retention. The superior performance of lambs fed the treated bagacillo diets could be accounted for by an increase in intake and digestibility.