Azolla, a protein-rich aquatic fern, plays a vital role in goat nutrition due to its high digestibility and nutritional value and were utilized as a dietary protein source on the digestibility, milk yield, and milk quality of lactating upgraded goats. A 20 weeks (140 days) feeding trial with a 2 weeks acclimatization period was conducted using 16, first parity lactating 50% Anglo-Nubian x 50% Native goats in a Randomized Completely Block Design. Data were analyzed using analysis of variance and significant differences among treatments were determined using Tukey’s Test at 5% level of significance. findings show that the final body weight of goats fed with formulation 4 (15% azolla) had significantly higher (p<0.05) final body weight of 31.75 kg compared to goats fed with formulation 1 (0% azolla) with 27.85 kg, but were comparable (p>0.05) to goats fed with formulation 3 (10% azolla) and formulation 2 (5% azolla) of 31.50 kg. Digestibility of feed and legumes was significantly higher (p<0.05) in goats fed with 5% azolla (90.76% and 77.06%, respectively) compared to the control, but comparable to those fed with 10% and 15% azolla. Milk analysis showed that the milk of goats fed with formulation 2 (5% azolla) had significantly higher (p<0.05) milk fat of 8.10 g/kg, protein of 4.80 g/kg, ash of 0.90 g/kg, Calcium of 204 mg/kg and 164 μg/kg compared to the milk quality of upgraded goats fed with other formulations. Additionally, goats fed with 5% azolla had the highest milk yield (696 ml/day) and profitability, with a net income of 788.85 and a return on investment of 18.80%. These findings suggest that incorporating 5% azolla in goat feed enhances growth performance, digestibility, and profitability, making it a viable strategy for improving goat production and income for farmers.