Low nitrogen (N) utilization efficiency (NUE, the ratio of retained N to N intake [NI]) of ruminants is always a potential dietary protein wastage as well as a global environmental problem, and dietary N manipulation is the most effective way to improve NUE. We conducted 2 experiments to investigate the effects of replacing oat hay by leguminous forages (alfalfa hay [AH] in experiment [Exp] 1 and common vetch hay [CVH] in Exp 2) with 4 levels (0%, 8%, 16% or 24% AH and 0%, 10%, 20% or 30% CVH on dry matter [DM] basis) at the same crude protein (135 g/kg DM) and metabolizable energy (10.1 MJ/kg DM) on feed intake, N metabolism, NUE and blood composition of crossbred Simmental calves. Sixteen calves of each Exp were assigned to the four diets in a randomized block design. Faecal N (FN) output and the ratio of FN to NI increased with increasing AH/CVH proportions, whereas urinary N (UN) output, the ratio of UN to NI, and the ruminal ammonia N concentration gradually decreased in both experiments. Nutrient digestibility (DM, organic matter [OM] and neutral detergent fibre [NDF]) of calves showed a parabolic trend with gradually increasing AH/CVH proportions. The highest values of nutrient digestibility (DM, OM and NDF) of calves were observed in 16% AH in Exp 1 and 20% CVH in Exp 2. Our findings suggest that 16% and 20% substitution (as a percentage of the total DM allowance) of AH and CVH, respectively, for oat hay are optimal diets to improve NUE and reduce the potential impact of N excretion from livestock farming on the environment through shifting routes of N from urine to faeces without negative effects on live weight gain and nutrient digestibility of crossbred Simmental calves in dryland environments.