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Prolonged cow-calf contact (CCC) could potentially improve dairy calf welfare. However, it is currently unknown how different types of CCC affect animals' biological functions. We evaluated health and performance parameters of dairy calves and their dams, where calves: (i) had no contact with their dam (NC), in which the calf was removed from the dam directly after birth (n = 10); (ii) were allowed to have partial contact (PC) with their dam, in which the calf was housed in a calf pen adjacent to the cow area allowing physical contact on the initiative of the dam but no suckling (n = 18); (iii) were allowed to have full contact (FC) with their dam, including suckling, in which calves were housed together with their dams in a free-stall barn (n = 20). Throughout the first 7 weeks postpartum, data were collected on the health status, fecal microbiota, hematological profile, immune and hormonal parameters, and growth rates of calves, and on the health status, metabolic responses, and performance of dams. Overall, FC calves had more health issues (P = 0.02) and a tendency for higher antibiotic usage (P = 0.07) than NC calves. Additionally, FC calves showed elevated levels of erythrocytes, hematocrit, hemoglobin, and leukocytes on day 49 compared to NC calves (P < 0.001). Calf fecal microbiota changed over time, and we found preliminary evidence that fecal microbiota is affected by the type of CCC, as reflected by differences in relative abundances of taxa including Lactobacillus in FC calves compared to NC and PC calves except on days 7 and 66. The FC calves had a greater average daily gain in body weight than NC and PC calves (P = 0.002). Cow health was not affected by the type of CCC, although in the first 7 weeks of lactation FC cows had a lower machine-gained milk yield accompanied by a lower fat percentage than NC and PC cows (P < 0.001). These results indicate that full contact posed a challenge for calf health, presumably because the housing conditions of FC calves in this experimental context were suboptimal. Secondly, ad libitum suckling leads to higher weight gains and negatively affected milk fat content besides machine-gained yields. More research into strategies to improve cow-calf housing and management in CCC systems is warranted.