Heat-treatment of colostrum reduces transmission of pathogens to neonatal calves but may alter the bioactivity of colostrum. The objective was to determine the effects of heat-treating colostrum on absorptive function and gut development in neonatal calves. First-milking colostrum was collected in batches and stored at −20°C. Batches were thawed, pooled, mixed thoroughly, and divided into equal volumes. Half was re-frozen in 1L aliquots and the other half was heat-treated at 60°C for 60 min then re-frozen in 1L aliquots. Holstein bull calves were enrolled in the study as they were born and received 2L of either heat-treated (n = 9) or unheated (n = 8) colostrum via esophageal tube feeder within 1.5h of birth. Blood samples were taken at 0 (pre-colostrum), 3, 6, 9 and 12h after birth for analysis of IgG and β-lactoglobulin (BLG) concentrations. Six calves from each treatment group were euthanized at 12h after birth and ileal tissue was collected for analysis of villus height, crypt depth, and goblet cell count. Statistical analysis was conducted using PROC MIXED of SAS with batch as a random effect and repeated measures where appropriate. Colostral IgG concentration did not differ between heated and unheated pools. Plasma IgG concentration tended to be higher in calves fed unheated versus heated colostrum at 9 h and the difference was significant at 12h (15.8 ± 1.4 versus 12.9 ± 1.4 mg/mL; P = 0.02). Plasma BLG concentrations were significantly higher in calves fed unheated versus heat-treated colostrum at 6 h (324.3 ± 52 versus 239.9 ± 51.0 mg/mL; P = 0.04) and 9h (258.2 ± 52.0 versus 126.3 ± 51.9 mg/mL; P = 0.002). By 12 h, there was no difference between the 2 treatment groups. These data suggest that different colostral proteins have different rates of absorption and biological half-lives. Villus height and crypt depth did not differ significantly between treatment groups. The average number of goblet cells on ileal villi was higher in calves fed heat-treated versus unheated colostrum (63.4 ± 3.3 versus 48.8 ± 3.3; P = 0.02). Results indicate that heat-treatment of colostrum altered absorption of colostral proteins and stimulated development of mucus-producing cells but did not affect mucosal growth.