A study with finishing lambs assessed the effect of dietary inclusion of Prosopis laevigata pods (PLPs) on performance, carcass characteristics, meat traits and fatty acid profile of subcutaneous fat. Twenty-one Rambouillet lambs (27.0 ± 3.0 kg BW) were assigned to one of three experimental diets with 0, 150 and 300 g PLP/kg DM. Evaluation of growth performance lasted 49 days. The experimental design was completely randomized and analysed with a mixed model. Lambs fed diets with 0, 150 and 300 g PLP had similar growth performance. Lambs fed diets with 300 g PLP/kg DM had better (p < 0.05) carcass yield and classification, less (p < 0.05) fat deposition and lower lightness (L*) value (p < 0.05) in meat than lambs fed diets with 0 and 150 g PLP/kg DM. Saturated fatty acids (palmitic and stearic) decreased (p < 0.05) and unsaturated fatty acids (oleic and linoleic) increased (p < 0.05) in subcutaneous fat of lambs fed diets with 150 and 300 g pods as compared with lambs not fed PLP. Prosopis laevigata pods are a safe feedstuff that can replace a third of conventional ingredients and reduce feed costs in growing lambs. Addition of PLP reduced (p < 0.05) total feed cost by 21%.