The regulations for minimal space and direction of travel for land transport in horses vary worldwide and there is currently no definitive guidance to promote equine health and welfare. This study evaluated the effects of bay size and direction of travel (forwards/backwards) in horses by comparing the behavioural, physiological, laboratory and gastroscopy parameters between transported and confined horses. A total of twenty-six mares took part in the study; 12 horses were confined for 12 h, and all mares underwent 12 hours’ transportation, travelling in single (n = 18) or wide bays (n = 8), and forward (n = 10) or rear (n = 16) facing. Behaviour was recorded during confinement/transportation and analysed using a behaviour sampling ethogram. Clinical examination, blood samples and gastroscopy were conducted before and after confinement/transportation. The frequency of behaviours relating to stress and balance increased during transport, and horses transported in a rear-facing position and in a wider bay size showed fewer balance-related behaviours. Balance behaviours, particularly loss of balance, were positively associated with the severity of gastric ulceration after transportation and elevated muscle enzymes, while increased stress behaviours correlated with decreased gastrointestinal sounds. Heart rate and rectal temperature after transportation were positively associated with balance and stress behaviours, and with squamous gastric ulcer scores. Transportation was associated with expected increases in cortisol and muscle enzymes, but positioning and space allowance had minimal effects on these analytes. Findings suggest that transportation in a rear-facing position and in wider bays might reduce the impact of transport on horse health and welfare, and monitoring behaviour in transit and physiological measurements after transportation should be recommended. Behavioural and physiological parameters were more sensitive than haematological, biochemical or endocrine analytes to identify horses suffering from transport stress.