Heterotrophic microalgae combined with soyhulls forms an algae meal (ALG) which contains partially deoiled microalgae (DMA; 57% DM basis) and soyhulls (43%). Eight whiteface wethers (23.02 ± 0.54 kg) were used in a 4 × 4 Latin square design to determine the effect of the DMA portion of ALG on total-tract nutrient digestibility. Lambs received 1 of 4 isonitrogenous dietary treatments (2 sheep·diet⁻¹·period⁻¹) where ALG was added at the expense of soyhulls: a soyhulls-based control (CON; 53% soyhulls), 10% DMA from ALG (DMA10), 20% DMA from ALG (DMA20), and 30% DMA from ALG (DMA30). There were 4 periods, with 10 d of adaptation and 5 d of total fecal and urine collection. Prior to each collection period was a 14 d washout period where all lambs were fed a common diet. Data were analyzed using Proc Mixed of SAS, and pooled LSMEANS and SEM are reported. Intake of OM and fecal OM output were similar (P ≥ 0.11) between CON and ALG-fed lambs. Urine output linearly increased (P = 0.02) as DMA increased in diets (0.57, 0.72, 0.77, and 0.87 ± 0.08 L/d for CON, DMA10, DMA20, and DMA30, respectively). Digestibility of OM (73.6, 72.9, 71.0, and 69.1 ± 1.01% for CON, DMA10, DMA20, and DMA30, respectively) linearly decreased (P < 0.01) as DMA increased in diets. Also, NDF (65.5, 61.3, 53.6, and 39.0 ± 2.36% for CON, DMA10, DMA20, and DMA30, respectively) and ADF (65.0, 60.7, 50.9, and 30.2 ± 1.94% for CON, DMA10, DMA20, and DMA30, respectively) digestibility linearly decreased (P < 0.01) as DMA increased in diets. Ether extract digestibility did not differ (P = 0.24) between CON and DMA-fed lambs. Nitrogen digestibility linearly decreased (P = 0.05) as DMA increased in the diet (60.2, 58.9, 58.0, and 57.2 ± 1.10% for CON, DMA10, DMA20, and DMA30, respectively). Also, N balance linearly decreased (P < 0.01) as DMA increased in the diet (10.1, 8.4, 8.9, and 6.8 ± 0.64 g/d for CON, DMA10, DMA20, and DMA30, respectively). These results suggest that the DMA portion of ALG may be less digestible than soyhulls, and even though the ALG had minimal effects on OM digestibility the differences in N balance may suggest an effect on growth in sheep, under the conditions of this study.