In open beef feedlot systems, more than 50% of dietary nitrogen (N) is lost as ammonia (NH3). Here we report an effective and economically-viable method to mitigate NH3 emissions by the application of lignite. We constructed two cattle pens (20 × 20 m) to determine the effectiveness of lignite in reducing NH3 emissions. Twenty-four steers were fed identical commercial rations in each pen. The treatment pen surface was dressed with 4.5 kg m(-2) lignite dry mass while no lignite was applied in the control pen. We measured volatilised NH3 concentrations using Ecotech EC9842 NH3 analysers in conjunction with a mass balance method to calculate NH3 fluxes. Application of lignite decreased NH3 loss from the pen by approximately 66%. The cumulative NH3 losses were 6.26 and 2.13 kg N head(-1) in the control and lignite treatment, respectively. In addition to the environmental benefits of reduced NH3 losses, the value of retained N nutrient in the lignite treated manure is more than $37 AUD head(-1) yr(-1), based on the current fertiliser cost and estimated cost of lignite application. We show that lignite application is a cost-effective method to reduce NH3 loss from cattle feedlots.