The current study evaluated the effects of dietary increments of sericea lespedeza (SL, Lespedeza juncea var. sericea) as a substitute for lucerne (Medicago sativa L.) in lamb finishing diets on nutrient intake and digestibility, rumen fermentation, microbial nitrogen (N) supply, N balance, and N utilization efficiency. Following a completely randomized design, 25 Dohne Merino intact male lambs (4–5 months old) with an average initial weight of 28.2 ± 1.74 kg were equally assigned to five dietary treatments containing 0, 62.5, 125, 187.5 and 250 g SL per kg diet as replacement for lucerne in total mixed rations. The lambs were acclimatized to the diets and environment for 21 days before data collection during a 5-day period. Daily, the feed offered, refusals and total fecal matter were weighed to determine nutrient intake and digestibility, while urine was collected for the determination of urine nitrogen and purine derivatives excretion. At the end of the data collection period, lambs were humanely slaughtered, and the rumen was opened to determine ruminal pH, and collect representative samples of rumen fluid to determine ruminal fermentation parameters. Dietary increments of SL had no influence (P > 0.05) on the lambs’ nutrient intake except for neutral detergent fiber (aNDFom) intake which increased linearly (P ≤ 0.05) with SL inclusion. As SL increased in the diets, the apparent total tract digestibility of dry matter, organic matter, crude protein, aNDFom, and ether extract linearly declined (P ≤ 0.05). The concentrations of butyrate, valerate, and iso-valerate were quadratically (P ≤ 0.05) influenced by dietary inclusion of SL with maximum concentrations observed at the 125 g SL/kg inclusion level. Dietary inclusion of SL had no influence (P > 0.05) on purine derivatives excretion, microbial N supply, N balance, and N utilization efficiency. Overall, replacing lucerne with SL up to 250 g/kg in lamb finishing diets had no detrimental effects on nutrient intake and utilization.