Tibetan sheep are indigenous to the Qinghai-Tibetan Plateau and are raised at an altitude between 3000–5000 m. In contrast, the crossbred fine-wool sheep were introduced to the plateau and are raised at an altitude between 2600 to 3500 m. Tibetan sheep graze grassland all year round while fine-wool sheep require feed supplements during the long cold season. Tibetan sheep were able to utilize dietary nutrients more efficiently than fine-wool sheep when offered adequate energy and protein diets. We questioned whether the responses would still favour Tibetan sheep with limited energy and protein intakes, as is often the case on the Qinghai-Tibetan Plateau. To answer this query, apparent nutrients digestibilities, rumen fermentation characteristics and urinary purine derivatives (PD) were compared between Tibetan and fine-wool sheep when fed oat hay at below maintenance levels: 0.3, 0.5, 0.7 and 0.9 voluntary intake. Five wethers of each breed of similar age and body weight (BW) were used in two concurrent 4 × 4 Latin square designs. Dry matter (DM), organic matter (OM) and neutral detergent fiber (NDF) digestibilities were higher in Tibetan than fine-wool sheep (P < 0.05), but were not affected by the level of oat hay intake (P > 0.10). As feed intake increased, ruminal pH decreased (P < 0.01) and total volatile fatty acid (VFA) concentration increased, both linearly (P < 0.001). Moreover, ruminal total VFA concentration (P < 0.05), ruminal soluble protein nitrogen (N) and saliva urea-N concentrations (P < 0.01) were higher in Tibetan than fine-wool sheep. Urinary total PD and its fractions increased linearly with feeding level (P < 0.01). Estimated microbial N synthesis was greater in Tibetan than fine-wool sheep (P < 0.05) and increased linearly with the level of oat hay intake (P < 0.001). It was concluded that both energy and protein metabolism were used more efficiently in Tibetan than in fine-wool sheep when offered below maintenance intakes, which would allow Tibetan sheep to cope better with the harsh, winter foraging conditions of the Qinghai-Tibetan Plateau.