Four male lambs (Katahdin; average live weight $25.9{pm}2.9$ kg) with "T" type cannulas in the rumen and proximal duodenum were used in a $4{ imes}4$ Latin square experiment to evaluate the influence of supplemental dry distillers grain with solubles (DDGS) levels (0, 10, 20 and 30%, dry matter basis) in substitution for dry-rolled (DR) corn on characteristics of digestive function and digestible energy (DE) of diet. Treatments did not influence ruminal pH. Substitution of DR corn with DDGS increased ruminal neutral detergent fiber (NDF) digestion (quadratic effect, p<0.01), but decreased ruminal organic matter (OM) digestion (linear effect, p<0.01). Replacing corn with DDGS increased (linear, $p{leq}0.02$) duodenal flow of lipids, NDF and feed N. But there were no treatment effects on flow to the small intestine of microbial nitrogen (MN) or microbial N efficiency. The estimated UIP value of DDGS was 44%. Postruminal digestion of OM, starch, lipids and nitrogen (N) were not affected by treatments. Total tract digestion of N increased (linear, p = 0.04) as the DDGS level increased, but DDGS substitution tended to decrease total tract digestion of OM (p = 0.06) and digestion of gross energy (p = 0.08). However, it did not affect the dietary digestible energy (DE, MJ/kg), reflecting the greater gross energy content of DDGS versus DR corn in the replacements. The comparative DE value of DDGS may be considered similar to the DE value of the DR corn it replaced up to 30% in the finishing diets fed to lambs.