Two trials were conducted to determine the optimal physically effective neutral detergent fibre (peNDF) level in corn stover-cracked-corn-based finishing diets for feedlot lambs. Concentrations of peNDF (10.0, 12.5, 15.0, and 17.5%) were controlled by replacing cracked corn grain with corn stover. In Trial 1, 32 Rambouillet × Katahdin intact male lambs (body weight [BW], 28.47 ± 2.70 kg) were used in a 63-d feeding trial. Dry matter intake (DMI), average daily gain (ADG), and feed efficiency (GF) were greater at the 12.5% peNDF level (quadratic component, P <.05). The dressing percentage increased linearly (p <.01) as peNDF decreased, but hot carcase weight (HCW) was greater for lambs fed 12.5% peNDF (quadratic effect, p <.01) than those fed different concentrations. In Trial 2, eight ruminally cannulated Pelibuey lambs (29.3 ± 4.2 kg BW) were used in a replicated 4 × 4 Latin square design to evaluate the effects of the treatment on total tract digestion. Ruminal pH, registered at 4-h post-feeding, linearly decreased (p <.01) from 6.70 to 5.77 as the level of peNDF decreased. The digestibility of dry matter (DM), organic matter (OM), and NDF increased linearly (p <.01) as the peNDF level decreased, but the apparent digestible energy (Mcal/kg) showed a quadratic effect (p <.01) with a peNDF of 12.5%. The findings show that the estimated optimal peNDF level in cracked-corn-based finishing diets for lambs in the finishing phase of fattening is approximately 11.5%. HIGHLIGHTS Physically effective NDF levels in finishing rations for lambs were tested; the study provides better understanding of peNDF level on finishing lambs Levels lower than 12.5% and greater than 15.0% peNDF decrease performance and carcase yield Total tract digestion and energy efficiency were maximal at 11.5% peNDF