Feed conversion efficiency of dairy cattle is an important component of the profitability of dairying, given that the cost of feed accounts for much of total farm expenses. Residual feed intake (RFI) is a useful measure of feed conversion efficiency, as it can be used to compare individuals with the same or differing levels of production during the period of measurement. If genetic variation exists in RFI among dairy cattle, selection for lower RFI could improve profitability. In this experiment, RFI was defined as the difference between an animal's actual feed intake and its expected feed intake, which was determined by regression of dry matter (DM) intake against mean body weight (BW) and growth rate. Nine hundred and three Holstein-Friesian heifer calves, aged between 5 and 7 mo, were measured for RFI in 3 cohorts of approximately 300 animals. Calves were housed under feedlot style conditions in groups of 15 to 20 for 85 to 95 d and had ad libitum access to a cubed alfalfa hay. Intakes of individual animals were recorded via an electronic feed recording system and BW gain was determined by weighing animals once or twice weekly, over a period of 60 to 70 d. Calves had DM intake (mean ± SD) of 8.3±1.37 kg of DM/d over the measurement period with BW gains of 1.1±0.17 kg/d. In terms of converting feed energy for maintenance and growth, the 10% most efficient calves (lowest RFI) ate 1.7 kg of DM less each day than the 10% least efficient calves (highest RFI) for the same rate of growth. Low-RFI heifers also had a significantly lower rate of intake (g/min) than high-RFI heifers. The heritability estimate of RFI (mean ± SE) was 0.27 (±0.12). These results indicate that substantial genetic variation in RFI exists, and that the magnitude of this variation is large enough to enable this trait to be considered as a candidate trait for future dairy breeding goals. A primary focus of future research should be to ensure that calves that are efficient at converting feed energy for maintenance and growth also become efficient at converting feed energy to milk. Future research will also be necessary to identify the consequences of selection for RFI on other traits (especially fertility and other fitness traits) and if any interactions exist between RFI and feeding level.