Nonconventional agro-industrial by-products such as traditional liquor residues (locally called katikala atella) are widely used by livestock farmers in Ethiopia. The objective of this experiment was to evaluate the supplementary value of katikala atella and malt sprout (MS) on performance of sheep fed a basal diet of Rhodes grass hay. Thirty intact yearling male sheep with an average initial body weight of 17.4 ± 0.74 kg (mean ± SD) were assigned to the treatments in a completely randomized block design: atella alone (T1), 75 % atella + 25 % malt sprout (MS) (T2), 50 % atella + 50 % MS (T3), 25 % atella + 75 % MS (T4), MS alone (T5), and Rhodes grass hay alone (T6). Grass hay was fed ad libitum to all treatments. The total dry matter (DM) and organic matter (OM) intakes of sheep fed T4, T5, and T3 diets were the highest (P < 0.05), while sheep receiving T6 had the lowest DM intake. The highest (P < 0.05) total crude protein (CP) intake was for sheep fed T5 diet, while the lowest was for those fed T6 diet. Sheep receiving T3 diet had higher (P < 0.05) DM, OM, CP, neutral detergent fiber (NDF), and acid detergent fiber (ADF) digestibility as compared with those fed T1, T2, and T6 diets. Sheep supplemented with 50-100 % malt sprout had similar (P > 0.05) DM, OM, CP, NDF, and ADF digestibility. The highest (P < 0.05) average daily gain was for sheep fed T3, T4, and T5 diets, while sheep in T6 lost body weight. Sheep fed T5 diet had the highest (P < 0.05) nitrogen retention, while those fed T6 diet had the lowest. The study has shown that a mixture diet consisting of equal parts of katikala atella and malt sprout (T3) are found to be superior in most of the required nutrient characteristics.