Ammonia fiber expansion (AFEX) is a promising method to enhance fiber digestibility of crop residues. Our objective was to determine if the AFEX process would enhance the feed value of rice straw fed to young Holstein steers. Holstein steers (n = 16; BW = 150 kg with SD of 20) were blocked by BW and randomly assigned within block to control or AFEX diets. The control contained 49% chopped untreated rice straw, 23% corn silage, 23% modified distillers grains, 2% soybean meal, 1.0% urea, and 1.5% minerals and vitamins and was calculated to contain 54% NDF, 17% CP, and 8% starch. The AFEX process increased CP of straw from 5 to 16% and in vitro NDF digestibility at 240 h from 62 to 88%. Diets were fed at same straw content but without added urea in the AFEX diet. Calves were fed once daily for ad libitum intake and slaughtered after 7 wk. Calves were weighed 3 consecutive days at the start, at 1 wk, and at end of the study, and once weekly during the study. Digestibility was assessed by samples every 15 h for 5 d in wk 5, and undigested NDF (240h) was used as a marker for calculations. Apparent total-tract digestibilities for DM and aNDF were greater in the AFEX than control diet (58% vs. 48% for DM at P = 0.003; 55% vs. 45% for aNDF at P = 0.002). Compared with control, AFEX tended to increase DMI (9.8 vs. 9.0 kg/d, P = 0.11) and average daily gain (0.81 vs 0.66 kg/d; P = 0.10). Carcass weight was 48% of BW for both groups, and mirrored changes in gain, but was not significantly different for the 2 treatments. Compared with control, AFEX resulted in 40% larger liver (P < 0.01), 17% larger kidney (P = 0.13), and 9% larger heart (P = 0.02). We conclude that the AFEX process improves the digestibility of rice straw and likely converts it into a more useful feed for ruminants when fed at half the total diet. This study supports the idea that the AFEX technology could enhance the production of ruminants in areas with limited feed resources and plentiful supplies of poor-quality crop residues.