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The effect of form of starter grain (coarse vs. ground) and inclusion of various levels of hay on body weight gain and rumen development was evaluated. Two experiments were conducted to determine the effect of form of diet and forage inclusion on intake, growth, feed efficiency, and weaning age in dairy calves. Diets consisted of commercial coarse starter (C), ground starter (G), coarse starter with 7.5% bromegrass hay of consistent particle size (8 to 19 mm) (H1), and coarse starter with 15% hay (H2). In experiment 1, intake was held constant across treatments until weaning, when feed was offered ad libitum. Calves receiving H1 and H2 were heavier and had greater body weight gain and greater feed efficiency than calves receiving C. There were no differences in intake. Total volatile fatty acid concentrations were higher, and the proportion of acetate was lower for calves fed G vs. C. In experiment 2, calves (n = 56) were offered diets on an ad libitum basis and weaned according to intake. There were no differences in body weight gain, average daily gain, feed efficiency, and age at weaning with respect to treatment. Starter and total dry matter intake tended to be greater in calves fed H1 and H2 vs. C. The addition of controlled particle size hay to diets of young calves appears to favorably alter rumen environment, resulting in increased intake and improved feed efficiency. Forage of a consistent particle size can be successfully utilized in starter rations of young calves. [ABSTRACT FROM AUTHOR]