A comparative study of the effect of dietary nitrogen (N) content [Low: 11·0; Medium-Low (MLow): 16·7; Medium-High (Mhigh): 23·1; High: 29·2 N g/kg dry matter (DM)] on apparent digestibilities, rumen fermentation and N balance was conducted in coarse wool Tibetan sheep and Gansu Alpine fine-wool sheep at Wushaoling in the northeast of the Qinghai-Tibetan Plateau. It was hypothesized that responses would differ between breeds and that responses would favour Tibetan over fine-wool sheep at low N intakes. Eight wethers [four Tibetan sheep and four fine-wool sheep, 20-24 months old; body weight ± standard deviation was 52 ± 3·2 kg] were used in two concurrent 4 × 4 Latin square designs. Dry matter, organic matter, neutral detergent fibre and acid detergent fibre digestibilities were higher in Tibetan than fine-wool sheep when fed the Low, MLow and High N diets while N retention was higher when the animals were fed the Low and MLow N diets. Tibetan sheep had a higher rumen pH than fine-wool sheep; however, total volatile fatty acids were similar between breeds. Molar proportions of acetate were higher but propionate and butyrate lower in Tibetan than fine-wool sheep. In addition, Tibetan sheep had higher concentrations of ruminal free amino acid-N and soluble protein-N than fine-wool sheep. Plasma and saliva urea-N concentrations were higher in Tibetan than fine-wool sheep when supplied with the Low N diet. It was concluded that Tibetan sheep were better able to cope with low N feed than fine-wool sheep because of the higher N retention and higher DM and fibre digestibilities with Low and MLow diets.