Conjugated linoleic acid (CLA) reduces mammary milk fat synthesis in a dose-dependent manner. Our objective was to determine the effects of lipid-encapsulated CLA (LE-CLA) supplementation on milk production, reproductive performance and metabolic responses in lactating dairy cows fed a grass silage-based diet. Seventy-two Holstein-Friesian cows (32 primiparous and 40 multiparous) were used in a completely randomized block design. Cows received either 80 g of LE-CLA daily or 60 g of calcium salts of palm fatty acids daily (control) from parturition until 60 days in milk. LE-CLA contained a 50:50 mix of cis-9,trans-11 CLA and trans-10,cis-12 CLA, resulting in a daily intake of 6 g of each isomer. Milk production and dry matter intake were recorded daily, and blood samples were collected 3-times a week. Blood samples were analysed for circulating concentrations of glucose, non-esterified fatty acids (NEFA), β-hydroxybutyrate (BHBA), insulin and insulin-like growth factor-I (IGF-I). Progesterone was measured in blood samples collected after the first post-partum insemination. Ovarian ultrasound examinations commenced at 8–10 d post partum and were carried out 3-times a week until first ovulation. LE-CLA treatment resulted in decreased milk fat concentration, with consequent improvements in energy balance and body condition score (BCS). The peak concentration of NEFA in blood was reduced by LE-CLA, but circulating concentrations of insulin, glucose, IGF-I, BHBA and progesterone were not affected. There was no effect of LE-CLA supplementation on the post-partum interval to first ovulation. Services per conception tended to be reduced. The reduction in milk energy output and improvement in energy status and BCS in LE-CLA-supplemented cows provides a strong rationale for further studies with greater cow numbers to test effects on reproductive performance.