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This study aimed to evaluate intake, digestibility, and performance in sheep fed increasing levels of annatto byproduct (AB). A total of 32 male sheep without defined breed were used. Their initial weight was 23.17±1.45 kg. The animals were housed in individual pens and offered feed twice a day. Nutrient intake was quantified by the difference between the fractions present in the offered feed and the remains. The apparent digestibility was estimated with the aid of the external marker LIPE®. Weight gain was measured by the difference between the initial and final weight of the animals. The intake of dry matter (DM; g/day; g/kg BW; g/kg0.75), organic matter (g/day), crude protein (CP; g/day), and neutral detergent fibre (g/day) was not affected (P>0.05) by addition of AB. The intake of ether extract (EE; g/day) and non-fibre carbohydrates (g/day) was influenced by the inclusion of AB. The apparent digestibility of DM, organic matter, CP, and EE was not affected (P>0.05) by the addition of AB. The AB can be included in the diet at levels up 300 g/kg of total DM without affecting consumption, digestibility, and weight gain in sheep.