Colostrum stimulates gastrointestinal development. Similar to colostrum, transition milk (TM; the first few milkings after colostrum) contains elevated nutrient levels and bioactive components not found in milk replacer (MR), albeit at lower levels than the first colostrum. We hypothesized that feeding neonatal calves TM, compared with MR, for 4 d following colostrum at birth would further stimulate intestinal development. Holstein bull calves were fed 2.8 L of colostrum within 20 min of birth, allocated to 1 of 11 blocks based on birth date and body weight (BW), randomly assigned to MR (n = 12) or TM (n = 11) treatments within block, and fed treatments 3 times per day. Milk from milkings 2, 3, and 4 (TM) of cows milked 2 times daily was pooled by milking number and fed at 1.89 L per feeding; milking 2 was fed at feedings 2 through 5, milking 3 at feedings 6 through 8, and milking 4 at feedings 9 through 12. TM was not pasteurized and contained 17% solids, 5% fat, 7% protein, 4% lactose, and 20 g of IgG per liter on average, whereas MR (as fed) contained 15% solids, 4% protein, 3% fat, 6% carbohydrate, and no IgG. Refusals were similar, so calves fed TM consumed 1.0 Mcal of metabolizable energy per day more than those fed MR. On the morning of d 5, calves were injected i.v. with 5 mg of bromodeoxyuridine per kg of BW and slaughtered 130 min later; then, intestinal sections were excised. Feeding TM, instead of MR, doubled villus length, villus width, villus to crypt ratio, and mucosal length in all intestinal sections, increased submucosal thickness 70% in the proximal and mid jejunum, and tended to increase submucosal thickness in duodenum and ileum. Mucosal surface area was also increased in both the ileum and mid jejunum when feeding TM by 19 and 36%, respectively. Treatment did not alter crypt depth. Bromodeoxyuridine labeling was increased 50% by TM compared with MR in the cells along the epithelium of the crypts and within the villi of all sections, indicating that TM increased cell proliferation compared with MR. Calves fed TM gained more BW than calves fed MR and had improved cough, fecal, nose, and ear scores. We conclude that feeding TM for 4 d following an initial feeding of colostrum stimulates villus, mucosal, and submucosal development in all sections of the small intestine in the first few days of life and improves health and growth.