The aim of this study was to assess the effects of particle size (PS) of alfalfa hay on growth characteristics and rumen development in dairy calves at two levels of alfalfa supplementation. Fifty newborn dairy calves (42.7 2.2 kg BW) were used in a 2 9 2 factorial arrangement with the factors supplementation level (low, 8%; or high, 16% on DM basis) and PS (medium, 2.92 mm; or long, 5.04 mm as geometrical means) of alfalfa hay. In addition, a control group without alfalfa hay was used. Hence, treatments were: control (C); low level with medium PS (LM); low level with long PS (LL); high level with medium PS (HM) or high level with long PS (HL). Growth performance of alfalfa-fed calves did not differ from control calves, but alfalfa supplementation decreased corneum thickness of the rumen wall. In alfalfa-fed calves, post-weaning starter intake was greater for LL calves than for LM calves. During the entire rearing period, starter intake was 26–32% higher for LL and HM calves than for LM calves. Pre-weaning average daily gain was higher for LL and HM calves than for HL calves, but this effect was not persistent over the entire rearing period. Final body weight decreased from 86 to 79 kg when the level of long PS alfalfa hay increased from 8 to 16%, but increased from 78 to 87 kg when the level of medium PS alfalfa increased from 8 to 16%. Regardless of PS and level, morphometric characteristics of rumen wall were generally similar among alfalfa feeding groups, but corneum thickness decreased from 8.7 to 6.1 lm with greater PS at the low level. These results indicate that adequate, but not excessive, physical stimulation is required for appropriate rumen development and growth performance of dairy calves.