The aim of this study was to improve nitrogen use efficiency (NUE) by optimizing the use of dietary protein and higher quality fiber from forage. Four lactating Holstein cows were used in a 4 × 4 Latin square design balanced for carryover effects with a 2 × 2 factorial arrangement of treatments. Treatments were low CP concentration with high NDF digestibility (LpHd), high CP concentration with high NDF digestibility (HpHd), low CP concentration with low NDF digestibility (LpLd) and high CP concentration with low NDF digestibility (HpLd). Crude protein concentrations for the rations were formulated to be 18 and 15% for the Hp and Lp diets, respectively. Diets were formulated around the LpHd diet to satisfy 105% of metabolizable protein requirements. Data were evaluated using the Mixed procedure in SAS with cow and period as random effects and diet as fixed effect. The indigestible NDF, as % of the NDF, of the 2 oat hays used were 40.80% for Ld hay and 31.54% for the Hd hay and wheat straw was included in the Ld diets to obtain iso-NDF diets. Cows were fed ad libitum for 14 d with data collection over the last 4 d of each period. Dry matter intake (DMI) for 3 of the diets were found to be similar, with the exception of the LpLd diet having lower DMI (P < 0.001) than the other 3 diets, showing how protein can counteract the lower forage quality by stimulating fibrolytic bacteria. Energy corrected milk yield decreased (P < 0.01) when feeding less CP, specifically of 2.46 kg/d for the Hd forage diet and 3.00 kg/d for Ld forage diet. However, nitrogen use efficiency was the highest (P < 0.05) for the lower protein diet in combination with Hd forage (32.3%). We conclude that lowering protein improved NUE significantly, probably due to higher N recycling by the animals, with forage digestibility and iNDF contributing to the level of improvement.