Dietary natural plant secondary metabolites (PSM) extracted from a pomegranate peel (PP) byproduct have the potential to improve milk yield and the milk fatty acid profile of dairy cows. This experiment was performed to assess the influence of different dietary levels of PP extract (PPE) on feedlot performance, ruminal status, nutrient utilization, and antioxidant status in fattening Moghani lambs. Thirty-two lambs (initial BW of 22 ± 1.2 kg) were used in a completely randomized design with a 72-d period and 4 treatments: PPE0 (no extract), PPE15 (15 mL PPE/kg of diet DM), PPE30 (30 mL PPE/kg of diet DM), and PPE45 (45 mL PPE/kg of diet DM). Feed intake, lamb growth, diet digestibility, microbial nitrogen (N) synthesis (MNS), N retention, rumen parameters, and blood metabolites were determined. The addition of PPE to the diet of lambs had no effect on DMI (linear [L], P = 0.96; quadratic [Q], P = 0.65). In vivo digestibility coefficients of DM, OM, CP, and Ash-free NDF were not affected (L, P ≥ 0.28; Q, P ≥ 0.26) by different levels of PPE, but it increased ADG (L, P = 0.045; Q, P = 0.19) and G:F (L, P = 0.046; Q, P = 0.20). Rumen pH, VFA concentrations, and acetate-to-propionate ratio were not affected (L, P ≥ 0.14; Q, P ≥ 0.23) by PPE supplementation. Dietary inclusion of PPE decreased the ruminal concentration of ammonia N (L, P = 0.014; Q, P = 0.67), total protozoa enumeration (L, P < 0.001; Q, P = 0.043), Entodiniinae population (L, P < 0.001; Q, P = 0.19), urinary N excretion (L, P = 0.005; Q, P = 0.26), whereas MNS (L, P = 0.019; Q, P = 0.23) and N retention (L, P < 0.001; Q, P = 0.66) increased. Feeding PPE had no effect (L, P ≥ 0.11; Q, P ≥ 0.17) on plasma concentrations of glucose, triglycerides, cholesterol, total protein, albumin, or albumin-to-globulin ratio. Blood urea N (L, P = 0.021; Q, P = 0.32) decreased with dietary addition of PPE, while total antioxidant capacity (TAC) in the rumen fluid (L, P = 0.032; Q, P = 0.64) and TAC in the blood (L, P = 0.041; Q, P = 0.51) increased. Overall, dietary inclusion of PPE, up to 45 mL/kg of diet DM, linearly improved animal growth, N retention, and antioxidant capacities of the blood and rumen fluid. The PPE is a safe natural additive for use in sheep diets that can help to reduce environmental pollution by reducing urinary N excretion.