Aim: The objective of the present study was to know the effect of dietary supplementation of varied levels of thermotolerant yeast to determine best levels for sheep diets by in vitro gas production. An in vivo study on Nellore rams was used for further evaluation of diets with three best levels of yeast (obtained from in vitro data) to determine diet with optimum yeast level for growing lambs by assessing nutrient digestibility, plane of nutrition and nitrogen balance. Materials and methods: A complete diet was formulated and supplemented with five levels (0 g/kg (D ); 1 g/kg (D ); 2 g/kg 1 2 8 (D ); 3 g/kg (D ); 4 g/kg (D ) and 5 g/kg (D ) of thermotolerant yeast (Saccharomyces cerevisiae, OBV-9) @ 5x10 cfu/g to 3 4 5 6 determine best levels for sheep diets by IVGP technique. An in vivo study was conducted on Nellore rams (39.75 0.24 kg body weight, aged 3 years) in a 4 x 4 latin square design for further evaluation of diets with three best yeast levels based on in vitro data, to determine optimum yeast level for diets of growing lambs by assessing nutrient digestibility, plane of nutrition and nitrogen balance. The rams were housed individually in metabolic cages that allowed separation of urine and faeces to evaluate digestibility of nutrients and N balance. Animals were given 10 days adaptation period followed by 7-day collection period, feed intake and refusals were recorded. During the digestibility and N balance study, feed, refusals and faeces were analyzed for dry matter (DM), organic matter (OM) and crude protein (CP) as per AOAC, USA, while fibre fractions like neutral detergent fibre (aNDF) and acid detergent fibre (ADF) were analyzed. Data were analyzed as per the procedures suggested by Snedecor, G. W. and Cochran, W. G. (1994) and the difference between treatment means was tested for significance by Duncan's multiple-range and F Test. Results: Higher (P<0.01) IVGP volumes, in vitro organic matter degradability, metabolizable energy (ME) and total degradable organic matter were recorded for rations D to D over control, whereas the difference among D to D diets was not 2 6 2 4 significant. Significant (P<0.05) partitioning factor and efficiency of microbial biomass synthesis (EMBP) values for rations D and D and significant (P<0.01) microbial biomass production for D to D diets, recorded. Significant (P<0.01) nitrogen 2 3 2 6 (N) retention was recorded in yeast supplemented rations with high EMBP than control. Dry matter intake (DMI), DMI (% b. 0.75 wt.), DMI/kg W and the digestibility of dry matter, organic matter, crude protein, crude fibre, ether extract (P<0.05), nitrogen free extract and fiber fractions were significant (P<0.01) on rations D to D over control, while the difference among 2 4 rations D to D was not significant. All rams were in positive N balance and was higher (P<0.01) on rations D to D over 2 4 2 4 control. The digestible crude protein (DCP) and ME were higher (P<0.01) on rations D to D indicating all rams were 2 4 adequately met with DCP and ME requirements as suggested by ICAR, India. Conclusions: The present study demonstrated the potential of theromotolerant yeast at 1 g/kg to 3g/kg level in improving digestibility of nutrients, intake of DCP and ME and N retention without affecting health of rams under study. Thus, incorporation of 1 g/kg level of thermotolerant probiotic yeast in complete diet for lambs appears to be beneficial for livestock producers.