ABSTRACTNowadays, agricultural by-product disposal is a major concern. The mushroom by-products could be used as an alternative feed source in rabbit diets. Therefore, partial replacement of berseem hay (BH) with spent mushroom substrate (SMS) was conducted in four experimental groups as follows: 0, 20, 40, and 60% of SMS. Forty weaned New Zealand White (NZW) rabbits at 6th weeks of age with an initial body weight of 520.25 ± 70.01 g were fed the experimental diet for 8 weeks. The results showed that ash content and cell wall constituents in SMS were higher than in BH, while the other nutrient compounds in SMS were lower than in BH. Dietary SMS at a level of 60% increased the final body weight (p = 0.05) and feed conversion ratio (p ≤ 0.05). However, average daily gain and total feed intake were not affected by treatments. The replacement of SMS at levels of 40 and 60% significantly improved nutrient digestibility and total digestible nutrient value. SMS 60% decreased (p = 0.040) faecal N and improved (p = 0.006) retained nitrogen. The SMS replacement increased caecum length (p = 0.001), and full and empty caecum weight (p = 0.001 and 0.021, respectively) compared to the control. The SMS inclusion caused a decrease (p = 0.021 and 0.007) in the pH and NH3-N concentrations, respectively. Total VFA, acetic acid, butyric acid, and propionic acid proportions increased with the dietary inclusion of SMS in a level-dependent manner. Using SMS as a replacement for BH in growing rabbit diets reduced the total feed cost, and consequently improved net revenue, economic efficiency, and relative economic efficiency.