The objective of the present study was to delineate how interactions between feeding sunflower oil (SFO) to partially defaunate the rumen and altering dietary ruminally fermentable carbohydrate may alter urea-N kinetics and N metabolism in lambs. In a 4 × 4 Latin square with a 2 × 2 factorial arrangement of treatments, four Suffolk ram lambs (61·5 (se 4·0) kg) were used. Treatments were 0 ( − SFO) v. 6 % (+SFO) SFO and dry-rolled barley (DRB) v. pelleted barley (PB). N balance was measured over 4 d, with concurrent measurement of urea-N kinetics using continuous intra-jugular infusions of [15N15N]urea. Feeding SFO decreased (P = 0·001) ruminal protozoa and NH3-N concentrations. Urinary N excretion was lower (P = 0·003), and retained N was higher (P = 0·002) in +SFO lambs compared with − SFO lambs. Endogenous production of urea-N (urea-N entry rate; UER) was similar across treatments. Urea-N transfer to the gastrointestinal tract (GIT) (GIT entry rate; GER), expressed as absolute amounts (16·4 v. 13·1 g/d) or as a proportion of the UER (0·693 v. 0·570), its anabolic use (9·0 v. 6·0 g/d) and microbial N supply (14·6 v. 10·9 g/d) were higher (P ≤ 0·001) in +SFO lambs compared with –SFO lambs. As a proportion of the UER, GER was higher, whereas urinary urea-N loss was lower, in lambs fed PB compared with those fed DRB (P = 0·01). In summary, feeding SFO increased urea-N recycling to the GIT and microbial non-NH3-N supply, thus providing new evidence that the improved efficiency of N utilization in partially defaunated ruminants could be partly mediated by an increase in urea-N recycling.