The productivity of small ruminants in Ethiopia is low due to a shortage of feed supply throughout the year, both in terms of quality and quantity. This problem leads to the utilization of locally available lignocellulose by‐products, which encompass high cellulose, hemicellulose, and lignin. It is known that the nutritive value of these lignocellulose by‐products can be improved through biological, chemical, or a combination of both treatments This study was aimed at evaluating body weight change, carcass characteristics, and economic efficiency of rams fed a total mixed diet containing biologically treated rice husk (RH) or sugarcane bagasse (SCB). Thirty‐six sheep, weighing an average initial body weight of 18 ± 1.8 kg were used. Two feeds (SCB and RH) and three biological treatments (Control, Trichoderma viride [Tv], and effective microbes [EM]) were used with a randomized complete block design (RCBD) in 2 × 3 factorial arrangements. Ram fed on RH containing diets had higher dry matter intake (DMI) (g/h/day), DMI (% of BW), DMI (g/kg BW0.75), average daily gain (ADG) (106 vs. 53 g/day), and feed conversion efficiency (FCE) (0.107 vs. 0.076) than SCB containing diets. Ram fed diets containing biologically treated roughages had significantly higher (p <.05) DMI (g/h/day), DMI (% of BW), DMI (g/kg BW0.75), ADG, and FCE. However, no significant differences were observed between sheep fed diets containing EM and Tv in DMI (g/h/day), DMI (% of BW), DMI (g/kg BW0.75), ADG, and FCE. This study also revealed that significantly (p <.05) higher carcass weight, dressing percentage (DP), rib eye muscle area, total non‐carcass fat, and total edible offal components had been recorded for rams fed diets containing RH as roughage source related to rams fed diets containing SCB. While other parameters were unaffected by treatments, sheep fed diets containing biologically treated feed had a higher hot carcass weight plus DP. However, no significant (p >.05) difference was found between diets based on biologically treated roughage. Profitability analysis indicated that sheep fattening on a diet containing RH and by‐products treated with Tv and EM showed greater profitability than untreated SCB. The authors had concluded that fattening sheep on diets containing RH results in higher feed intake, better body weight gain, more carcasses and higher profits, but optimum inclusion levels need further research, for either treated or untreated SCB. [ABSTRACT FROM AUTHOR]