Effects of prill size of a palmitic acid-enriched fat supplement (PA; 85% C16:0) on feed intake, nutrient digestibility, and production responses of dairy cows were evaluated. Twenty-four Holstein cows (120 ± 44 DIM) were randomly assigned to treatment sequence in a 4 × 4 Latin square design. Treatments were a control diet (CON; no added PA), or 2.0% PA added either as a small prill size (SM; 284 ± 12.4 µm), medium prill size (MD; 325 ± 14.7 µm), or large prill size (LG; 600 ± 17.8 µm) supplement. PA replaced soyhulls in the ration and diets contained 21% forage NDF, 16% CP and 26% starch. Periods were 21 d in length with the final 5 d used for sample and data collection. Indigestible NDF was used as an internal marker to estimate fecal output and nutrient digestibility. The statistical model included the random effect of cow and period and the fixed effect of treatment. Overall, PA increased milk fat content (4.25 vs. 3.99%; P < 0.01), milk fat yield (1.48 vs. 1.39 kg/d; P < 0.01), tended to increase 3.5% FCM (39.2 vs. 37.7 kg/d; P = 0.10), and improved feed efficiency (FCM/DMI; 1.51 vs. 1.42; P < 0.01). However, compared with CON, PA treatments did not affect DMI, body condition score, or yields of milk, protein, and lactose. Overall, PA increased NDF digestibility (45 vs. 42%; P < 0.01) and reduced the digestibility of 16-carbon FA (72 vs. 79%; P < 0.01) and total FA (77 vs. 80%; P < 0.01). Compared with CON, PA reduced the yields of de novo-synthesized (<16-carbon) milk FA (251 vs. 297 g/d; P < 0.01) and preformed (>16-carbon) milk FA (383 vs. 430 g/d; P < 0.01), and increased the yield of 16-carbon milk FA (457 vs. 378 g/d; P < 0.01). There was no effect of prill size of PA on DMI, yield of milk and milk components, or feed efficiency. However, LG increased 16-carbon FA digestibility compared with MD (74 vs. 71%; P < 0.05) and SM (74 vs. 72%; P < 0.05). Additionally, LG increased total FA digestibility compared with MD and SM (78, 76 and 76%, respectively; P < 0.05). These results demonstrate that PA increased milk fat concentration and yield and feed efficiency. Although prill size affected FA digestibility, this had no effect on animal performance.