The objective of this study was to describe and quantify the effect of prepartum digital dermatitis (DD) on first-lactation performance. A cohort of 719 pregnant heifers was monitored for DD for a period of 6 mo before calving. The heifers were classified by the number of DD events diagnosed as Type I, Type II and Type III (no DD, one DD event, and multiple DD events, respectively) during this period. After calving, health during initial 60 d in milk (DIM), reproductive and hoof health outcomes, and milk production were compared among the 3 group types. Multivariable logistic and linear models were adjusted for age, height, and girth circumference at enrollment, as well as type of trace mineral supplementation during the pre-partum period. Overall, cows experiencing DD during the rearing period showed inferior production and health outcomes compared with healthy heifers during the first lactation. A numerical difference was found on the percentages of assisted calvings, stillbirths, culls before 60 DIM, and diseased cows during the fresh period between Type III and Type I cows. Significantly lower conception risk at first service (OR [95% CI] = 0.55 [0.33, 0.89]) and increased number of days open (mean [95% CI] = 24 d [5.2, 43]) were observed in Type III compared with Type I cows. In relation to hoof health, a significantly increased risk of DD during first lactation was found in Type II and III cows (OR = 5.16 [3.23, 8.29] and 12.5 [7.52, 21.1], respectively), as well as the earlier occurrence of DD post-calving (mean [95% CI] = 59 d [20, 96], and 74 d [37, 109]). Compared with Type I cows, decreased milk production during initial 305 DIM was estimated at 199 and 335 kg for Type II and III cows, respectively. This difference was due to a greater decline in rate of production (less persistence) after peak yield (P < 0.01). Given the long-term effects of DD on health, reproduction, and production, priority should be given to efficient DD prevention and control programs during the rearing period of dairy heifers. Intensive intervention programs are expected to increase overall well-being and farm profitability, based on active long-term DD surveillance, mitigation of risk factors, and prompt treatment.