A method for converting feedlot fecal waste materials into methane and animal feed is disclosed. In the disclosed method, the feedlot fecal waste materials are collected, combined with water to form a slurry and the slurry is thereafter subjected to an anaerobic fermentation process. The anaerobic fermentation process is carried out under conditions such that a methane rich gas is formed which can be collected and utilized as an energy source. The liquid residue material from the anaerobic fermentation step is thereafter subjected to an aerobic fermentation process to produce a protein rich material that can be utilized as an animal feed. The liquid residue remaining from the aerobic fermentation process can be utilized as a fertilizer material.