Several concerns exist on the performance and health attributes of sheep fed on complete replacements of the traditional feed ingredients with dried distillers' grain solubles (DDGS). The study intended to know the effect of DDGS on replacing the peanut cake (PNC) at 0%, 50%, 75%, and 100% in sheep fed Jowar stover-based diet. Replacing PNC with DDGS increased (P < 0.05) the final body weight and concentrate intake. The weight gain and average daily gain tended to increase (P = 0.086), whereas the feed conversion ratio tended to decrease (P = 0.092) with increased DDGS inclusion levels. The CP intake increased linearly (P < 0.01) with an increase in DDGS levels. However, the intakes of DM, OM, NDF, and ADF increased quadratically (P < 0.01) and showed a quadratic maximum at 75% replacements group. The in vitro dry matter digestibility and 24h-gas (ml) production linearly increased (P < 0.05) with increased DDGS inclusion levels, while the CH4 (% total gas) and CH4 (ml) showed a quadratic increase (P < 0.05). The metabolisable energy, ammonia nitrogen, and volatile fatty acid concentrations were higher for DDGS diets. Further, the Gompertz curve fitting of the gas production data revealed higher asymptotic volume with lower constant of integration (b) and rate of production (k) of the DDGS incubations. No significant differences were observed for any of the carcass characteristics, except for leg weight, which showed a linear increase (P < 0.05). Increased tendency was observed for EBW, loin eye area at 12th rib, and edible portion of the sheep fed DDGS groups. Further, the visceral organs and carcass composition did not show any significant differences, except for kidney weight (linear, P < 0.05). The income over feed cost (IOFC) was higher for 100% DDGS group with lower feed cost and higher income per Kg mutton. Replacing the traditional peanut cake with DDGS in the crop residue-based diets of growing lambs contributes to higher yields for producers.