Two experiments were carried out to investigate the effect of water consumption on the nitrogen utilization in sheep fed only grass diets in either the fresh or dried form. In Experiment I, water intake was equalized in both feedings of fresh and dried grasses, and in Experiment II, water intake in dried grass feeding was restricted about 50% of that in fresh grass feeding. The digestibilities of nutrients tended to be clearly high in feeding dried grass when water intake was equalized to that in feeding fresh grass. The digestibilities of crude protein and crode fat were depressed after feeding dried grass when water intake was restricted about 50% of that in feeding fresh grass, although digestibilities of the other nutrients were similar in both diets of fresh and dried grasses. The retained nitrogen was significantly more after feeding dried grass with equalized water intake than after feeding fresh grass. When water intake was restricted in feeding dried grass, nitrogen retention was similar in both feedings of fresh and dried grasses, although urinary nitrogen excretion was clearly decreased after feeding dried grass. The concentration of total VFAs in the rumen fluid tended to be clearly great after feeding dried grass than after feeding fresh grass, when water intake was equalized in both feedings. When water intake was restricted in feeding dried grass, ruminal VFAs level also tended to be higher in dried grass feeding than in fresh grass feeding. The level of blood urea-nitrogen was almost the same in both feedings of fresh and dried grasses, when water intake was equalized. The level of blood urea-nitrogen was significantly increased in feeding dried grass when water intake was restricted about 50% of that in feeding fresh grass. There was no obvious effect of equalized water intake on the level of plasma total protein, although the level of plasma total protein was significantly increased by restriction of water intake in feeding dried grass. From these results, it would be suggested that the nitrogen utilization in sheep fed on hay (or dried grass) can be fairly improved by adjusting water intake to that in feeding fresh grass, when dry matter intake was similar in both feedings.