The effects of two levels of manure application (184 and 275 kg N ha−1 year−1) on herbage yield, quality, and wintering ability during the cropping of a dwarf genotype of late-heading (DL) Napiergrass (Pennisetum purpureum Schumach) oversown with Italian ryegrass (IR; Lolium multiflorum Lam.) were examined and compared with chemical fertilizer application (234 kg N ha−1 year−1) for 4 years to determine a sustainable and environmentally harmonized herbage production in a hilly area (340 m above sea level). No significant (p > 0.05) differences in growth attributes of plant height, tiller density, percentage of leaf blade, or dry matter yield appeared in either DL Napiergrass or IR among moderate levels (184–275 kg N ha−1 year−1) of manure and chemical fertilizer treatments. IR exhibited no significant detrimental effect on spring regrowth of DL Napiergrass, which showed a high wintering ability in all treatments. In vitro dry matter digestibility of DL Napiergrass tended to increase with increasing manure application, especially at the first defoliation in the first three years. Manure application improved soil chemical properties and total nitrogen and carbon content. The results suggested that the lower rate of manure application of 184 kg nitrogen ha−1 year−1 would be suitable, which would be a good substitute for chemical fertilizer application with an equilibrium nitrogen budget for sustainable DL Napiergrass and IR cropping in the hilly region of southern Kyushu.