Thirty-two lactating Karagouniko ewes were allocated at random to four groups for 6 weeks, to examine the effect of four diets: C (control treatment, ration without algae); LA (ration with low level of algae); MA (ration with medium level of algae) and HA (ration with high level of algae); containing 0, 23·5, 47 and 94 g algae, respectively, on the enrichment of milk and dairy products. Addition of algae reduced (P<0·001) DM intake for treatments MA and HA. Milk yield did not differ between treatments but milk composition was significantly affected by dietary inclusion of algae. Milk fat content was significantly increased (P<0·001) for treatment HA whereas milk protein content was significantly increased (P<0·001) for all treatments containing algae. Milk from treatments LA, MA and HA was significantly enriched in the following PUFA: C20[ratio ]5 (n-3) (0·4–2·1%), C22[ratio ]5 (n-6) (0·8–4·1%), C22[ratio ]6 (n-3) (4·3–12·4%) (P<0·001) and C22[ratio ]5 (n-3) (2·1–3·1%) (P<0·05), which were not detected in control milk. Feta cheese and yogurts produced from the enriched milk had identical composition with the milk, and would be characterized as healthy foods. The ratio of n-6 to n-3 fatty acids was 2·5–4·5.