Abstract: Protein encapsulated fats (PEF) are routinely used in the manufacture of calf milk replacers. The use of PEF improves fat mixability to ensure the milk replacer (MR) when mixed and fed is a homogenous solution for neonatal calves. A new alternative PEF has been developed that improves mixability and solubility to ensure a homogenous solution. The alternative PEF is hypothesized to potentially improve growth performance (average daily gain, feed intake and/or feed efficiency) of neonatal calves. The objective was to evaluate standard and alternative PEF when fed to Holstein calves. Forty 2- to 5-d old Holstein bull calves were blocked by body weight (BW) and randomly assigned to 1 of 2 treatments (N=20/treatment) using a randomized complete block design. Treatments were: 1) Control: STD fat source; 2) PEF: alternative PEF fat source based on choice white grease. The MR were 22:20 (crude protein: CP:fat) amino acid balance and fed 2x/d along with a 22% CP calf starter (CS) and free choice water. The MR were fed at 15% solids at 0630 and 1800 h fed at 0.567 kg/d for d 1-14, increased to 0.85 kg/d for d 15-35, and reduced to 1x/d at 0.425 kg/d for d 36-42 to facilitate weaning at 42 d with ad libitum calf starter fed for the remaining days of the 56 d study. Calves fed STD and PEF were similar (P > 0.10) in BW gain (37.4 and 35.9 kg for STD and PEF, respectively), average daily gain (679.8 and 652.7 g/d), CS intake (0.69 and 0.67 kg/d), total DMI (1.19 and 1.17 kg/d) and feed conversion (0.559 and 0.543 kg/kd). No differences (P > 0.10) were detected in frame measurements and fecal scores among treatments. Encapsulated fat sources can be used to manufacture milk replacers that result in similar growth performance, but potentially at a cheaper cost.