Urea treatment is a method in which straw is treated by ammonia released from urea. The process is similar to ammonia treatment, and it is a technically feasible method to improve the nutritive value of straw. Application in the field depends on economic and practical considerations. Local prices of feed and produce as well as type and level of animal production determine whether there is any economic advantage in feeding treated (TS) over untreated straw (US). Two approaches are used to assess the economics of straw treatment: (a) comparison of the cost of a unit of energy (TDN) and crude protein (CP); (b) the use of least cost ration formulation (LCRF). The first approach is convenient but can be misleading because of its simplifications. The use of LCRF with linear programming can account for more factors, such as dry matter intake limitations. The calculations show that straw treatment is economically attractive (a) when treated straw is cheap compared with other supplements for cows of medium production, and (b) when animal products can be sold at a remunerative price. Secondary effects of treatment on health, calf rearing or composition of produce are reviewed and no negative effects are known. Aspects of ammonia economy and savings of concentrate as well as the use of straw for other purposes are discussed. The emphasis of this article is on urea treatment of rice straw for the tropical smallholder's farming system, especially in south and southeast Asia, with reference to work elsewhere.