This work was conducted to evaluate the effect of tannins, contained in a by-product derived from olive oil extraction (two-stage olive cake), on nutrient digestibility, nitrogen (N) losses and liver and kidney functions in goats and wethers. Six Segureñ a wethers and six Granadina goats were fed three experimental diets: alfalfa hay (AH); alfalfa hay and a concentrate (formulated with twostage olive cake, barley and a mineral-vitamin mixture) without (AHCO) or with polyethylene glycol (PEG) addition (AHCOP). The inclusion of two-stage olive cake increased condensed tannins content of the diet and led to a decrease ( P , 0.001) in dry matter, organic matter, neutral-detergent fibre, acid-detergent fibre and crude protein (CP) digestibility. PEG supply increased ( P , 0.001) CP digestibility and N losses in urine and faeces only in wethers. Concentrations of creatinine and alkaline phosphatase activity, measured in the serum of animals, were not modified either by olive cake inclusion or by PEG supply. Results from this work indicate a higher sensitivity of sheep to diets containing condensed tannins, compared with goats, and reveal no toxic effect of tannins from two-stage olive cake at the concentration used in the experimental diets.