This study was conducted to evaluate nutrient intake, growth performance, carcass characteristics and economic performances of yearling Arsi-Bale lambs fed diets based either sugarcane tops (SCT) silage or hay replacing natural pasture hay as a roughage source. The treatments were: natural pastures hay (NPH) without SCT (T1, control); substituting 33 and 67% NPH with either SCT silage (T2, T3) or SCT hay (T4, T5), on dry matter (DM) basis, respectively. Roughages were fed ad libitum along with 350 g/head/day concentrate mix. Thirty yearling Arsi-Bale lambs (Initial body weight, 19.36±0.27 kg) were allotted to the treatments in randomized complete block design. The feeding trial lasted for 90 days followed by slaughter for carcass evaluation. Dry matter intake was lower (P0.05) by the level of SCT hay. Lambs fed on a diet containing higher SCT hay had the lowest (P<0.0001) crude protein (CP) intake, while the intake of neutral detergent fiber (NDF) and acid detergent fiber (ADF) were lower (P0.05) in growth performances, feed efficiency (FE) and carcass characteristics of the lambs. The average final body weight, body weight change, average daily gain (ADG) and feed efficiency (FE) were: 27.21 kg, 7.85 kg, 87.22 g and 0.110 (g gain/g DM intake), respectively. Higher net income (113.08 Birr/lamb) and profit margin (0.47 Birr/lamb) were fetched by lambs fed on the silage based diet, followed by the group fed SCT hay and control diet. In conclusion, SCT silage or hay can replace up to 67% of natural pasture hay for yearling Arsi-Bale lambs at an economic advantage.