Inclusion of nitrate in the diet of ruminants has been effective in reducing enteric emission of the greenhouse gas methane, but increases the risk of nitrate toxicity in the animal. An experiment was conducted to investigate if coating nitrate salts with lipid would reduce risks of nitrite toxicity in sheep without compromising the methane mitigating effect achieved using uncoated nitrate. Three forms of nitrate (uncoated nitrate; coated with palm oil or coated with paraffin wax) were administered intraruminally to sheep, with nitrate toxicity risk being evaluated by determining blood methaemoglobin (MetHb) levels. Nitrate and nitrite concentrations in plasma and rumen fluid, as well as methane and nitrous oxide production were also evaluated. Sheep supplemented with isonitrogenous amounts of urea were used as negative controls. There was no significant effect of palm oil coating on MetHb but coating with paraffin wax lowered MetHb levels, rumen and plasma nitrate concentrations (P < 0.05) relative to concentrations in urea-supplemented sheep. Total VFA concentrations in rumen fluid were unaffected by coating nitrate, but acetate proportion increased while butyrate and propionate proportions declined over time in all treatments after intraruminal nitrate administration (P < 0.05). It is suggested that these changes were caused by the strong capacity of nitrate to act as an electron acceptor. There was substantial variation between animals in ruminal nitrate and nitrite concentrations and in blood MetHb when the same mass of nitrate was administered directly into the rumen, showing that individuals differ in their ability to metabolize nitrate. Whereas methane production over the 22 h period of measurement was unaffected by the treatments, methane production during the first 3 h of measurement post-feeding was reduced similarly by both coated and uncoated nitrate supplements compared to urea. The small amount of supplemented nitrate introduced and the rapidity of nitrate reduction may both explain why methane mitigation was only observed for a short period after administering the treatments. Over 22 h in respiration chambers, nitrous oxide emissions were significantly increased by uncoated nitrate supplements compared to urea (P < 0.05). Nitrous oxide emissions by sheep fed coated nitrate did not differ from those of sheep fed urea. It is concluded that coating dietary nitrate can protect sheep against nitrite toxicity without adversely affecting methane mitigation.