The effects of dietary nitrate on DM digestion, rumen volatile fatty acid concentrations, microbial protein outflow, rumen water kinetics, and methane production were studied. Eight rumen-cannulated sheep were acclimated to a diet consisting of chaffed oaten hay supplemented with either 4% KNO₃ or 0% KNO₃ but made iso-nitrogenous by the addition of urea. Nitrate supplementation did not affect blood methaemoglobin concentration, DM intake, whole tract or ruminal DM digestibility and the sheep appeared healthy at all times throughout the acclimation and experimental periods. Nitrate did cause changes in rumen fermentation consistent with its acting as a high-affinity hydrogen acceptor, i.e. there was a tendency towards a lower molar percentage of propionate in the rumen volatile fatty acids, and higher molar ratio of acetate to propionate. Methane yield (MY, L methane/kg DM intake) was reduced by 23% in KNO₃-supplemented sheep (P < 0.05) and these sheep tended to have a shorter mean fluid retention time in the rumen (MRT). There was a significant association between MRT and MY, such that a shorter MRT was associated with a lower MY. The results confirmed that the presence of nitrate in the diet lowers enteric methane production even though there was considerable between-animal variation in gut kinetics and methane production.