A series of experiments was conducted to study the effects of white rot fungal treatment of cereal straw on lignin degradation, dry matter digestibility by cellulase (Ce-DMD) and digestible organic matter intake (DOMI) in sheep. Four strains (Hi80-2, Hi76-3, IPB No. 53 and TMl30026) of Pleurotus ostreatus were used for the experiments. After 60 days of fermentation (Hi80-2) of rice straw, the content of acid-detergent lignin (ADL) decreased rapidly and Ce-DMD increased from 31 to 52 %. Supplementation of rice bran to the straw culture did not affect appreciably the ADL content and Ce-DMD. Treatment of rice straw, wheat straw and soybean straw with IPB No. 53 decreased the ADL content and increased Ce-DMD remarkably. After 135 days (Hi76-3 and TMI30026) and 140 days (IPB No. 53) of fermentation of rice straw, DOMI in sheep fed treated straw was higher than that in the animals fed untreated straw. Treatment with TMl30026 increased DOMI by 58 %. These results indicate that solid state fermentation with Pleurotus ostreatus improves the nutritive value of cereal straw.