The objective of this study was to investigate the effect of replacement of berseem hay by watermelon vine (WMV) biologically treated with Penicillium oxalicum fungi (rations contained 0 “control ration", 25, 50, 75 and 100 % of WMV) on digestibility parameters using fifteen adult crossbred male sheep 3 for each ration, rumen liquor parameters using three crossbred female sheep fitted with permanent rumen fistula and performance of milk production using ten lactating crossbred Friesian multiparous used in duplicated 5X5 Latin squares. The results revealed that an improvement was observed for the rations containing 25 and 50 % WMV and their results were comparable with the results of control ration for digestibility coefficients, nutritive value, TVFA's, acetic acid, C2:C3 ratio and microbial nitrogen synthesized, also were significantly higher than that the rations containing 75 and 100 % WMV. Dry Matter  intake, milk yield and composition indicated that cows fed control and R2 (25% treated WMV and 75% berseem hay) recorded significantly (P<0.05) the highest yield of actual milk, 4% FCM and milk contents followed by cows fed R3 (50% treated WMV and 50% berseem hay). While, there were no significant differences among the experimental rations in feed intake. Cows fed R2 and R1 (control) showed the highest economic efficiencies followed by R3, while those fed the R4 (75% treated WMV and 25% berseem hay) and R5 (100%treated WMV and 0% berseem hay) rations had the lowest values.