Objectives - To estimate risk and identify risk factors for congenital infection with bovine viral diarrhea virus (BVDV) not resulting in persistent infection and examine effect of congenital infection on health of dairy calves. Animals - 466 calves. Procedures - Calves from 2 intensively managed dry-lot dairies with different vaccination programs and endemic BVDV infection were sampled before ingesting colostrum and tested with their dams for BVDV and BVDV serum-neutralizing antibodies. Records of treatments and death up to 10 months of age were obtained from calf ranch or dairy personnel. Risk factors for congenital infection, including dam parity and BVDV titer, were examined by use of logistic regression analysis. Effect of congenital infection on morbidity and mortality rates was examined by use of survival analysis methods. Results - Fetal infection was identified in 10.1% of calves, of which 0.5% had persistent infection and 9.6% had congenital infection. Although dependent on herd, congenital infection was associated with high BVDV type 2 titers in dams at calving and with multiparous dams. Calves with congenital infection had 2-fold higher risk of a severe illness, compared with calves without congenital infection. Conclusions and Clinical Relevance - The unexpectedly high proportion of apparently healthy calves found to be congenitally infected provided an estimate of the amount of fetal infection via exposure of dams and thus virus transmission in the herds. Findings indicate that congenital infection with BVDV may have a negative impact on calf health, with subsequent impact on herd health.