This study was designed to evaluate dry matter intake (DMI), ruminal fermentation, ruminal digesta outflow, omasal flow of N constituents, and ruminal and total-tract digestibility in response to increasing dietary lipid content derived from high-lipid by-product-based pellets for finishing beef cattle. Five ruminally cannulated heifers were used in a 5 × 5 Latin square design. Dietary treatments were iso-nitrogenous with increasing ether extract (EE) concentrations resulting in dietary concentrations of 3.5%, 4.2%, 4.7%, 5.1%, and 5.9% of dry matter. Periods were 28 d in duration with the first 19 d used for dietary adaptation and the last 9 d for sample and data collection. Dry matter intake, ruminal pH, omasal flow of N constituents, and short-chain fatty acid concentrations were not affected by increasing dietary EE content (P ≥ 0.10). Increasing dietary EE content increased outflow of EE from the rumen (P < 0.001). Apparent ruminal and total-tract digestibility of EE increased linearly (P ≤ 0.03) with increasing dietary EE levels. Results indicate that increasing dietary EE content from 3.5% up to 5.9% of DM by including high-lipid by-product-based pellets does not alter site of nutrient digestibility with no negative effects on nutrient intake, ruminal fermentation, or apparent ruminal, and total-tract digestibility.