Structural growth, feed consumption, rumen development, metabolic response, and immune response were studied in Holstein calves fed milk through either a conventional method or a step-down (STEP) method. In the conventional method, calves (n = 20) were fed colostrum and then milk at a rate of 10% of their BW for the entire period of 44 d. In the STEP method, calves (n = 20) were given colostrum and then milk at a rate of 20% of their BW for 23 d, which was reduced (between d 24 to 28) to 10% of their BW for the remaining 16 d. The calves on both methods were weaned gradually by diluting milk with water between d 45 and 49. After weaning, feed consumption, structural growth, and body weight gain were monitored until calves were 63 d of age. At d 63, twelve calves (6/treatment) were euthanized and rumen papillae length, papillae width, rumen wall thickness, and emptied forestomach weight were recorded. At wk 4, 7, and 9, ruminal contents were collected to enumerate rumen metabolites. The STEP-fed calves consumed a greater amount of milk than conventionally fed calves during the pre-STEP (d 1 to 28), post-STEP (d 29 to 49), and preweaning (d 1 to 49) periods. Consumption of starter and hay was greater during the pre-STEP period and lesser during the post-STEP and postweaning (d 50 to 63) periods in calves on the conventional method than on the STEP method. Body weight gain and structural growth measurements of calves were greater on the STEP method than on the conventional method. A hypophagic condition caused by greater milk consumption depressed solid feed intake of STEP-fed calves during the pre-STEP period, and a hyperphagic response caused by a reduced nutrient supply from milk triggered their consumption of solid feed during the post-STEP and postweaning periods. Ruminal pH and concentrations of ammonia, total volatile fatty acids, acetate, propionate, butyrate, and plasma beta-hydroxybutyrate were higher in calves on the STEP method and at weaning and postweaning (d 63) were lower in calves on the conventional method. Emptied weight of the forestomach, rumen wall thickness, papillae length, papillae width, and papillae concentration were higher in calves on the STEP method than in those on the conventional method. Blood glucose was lower, and blood urea nitrogen and beta-hydroxybutyrate at weaning and postweaning were higher in STEP-fed calves. Serum IgG, IgA, and triglycerides for 1, 2, and 3 wk of age were higher in calves on the STEP method than in those on the conventional method. In conclusion, greater feed consumption, BW gain, and structural growth, and a more metabolically and physically developed rumen were observed in calves on the STEP method than in those on the conventional method.