Sixty dairy heifers from seven Austrian herds, with high prevalence of Staphylococcus aureus mastitis, were used in this pilot study. Heifers were randomly allocated to two groups. The treatment group received at parturition intramuscularly 10 million i.u. of penethamate hydriodide and then 24 h later, 5 million i.u.; the control group received no treatment. Bacteriological examination was conducted on 7, 14, 21, 35 and 49 d post partum (pp) and milk yield data, fat and protein contents and SCC data were collected every 5th week for the first 200 d of lactation. Occurrence of retained placenta and endometritis were recorded, and the days open of both groups were compared. No effect was observed on the postparturient genital tract health and reproduction indicators. On day 7 pp, four intramammary infections (IMI; two severe clinical; one mild clinical; and one subclinical mastitis) were detected in the untreated control group, whereas there were no IMI in the antibiotic-treated group. At subsequent samplings, there were fewer IMI in the antibiotic-treated group, which were later in lactation, less severe and less persistent. Although SCC was numerically lower in the treatment group, significant differences in SCC between groups could not be detected. Antibiotic-treated heifers produced significantly more milk during the first 15 weeks of lactation than untreated heifers. Over the whole observation period (200 d), peripartum antibiotic-treated heifers produced 323 kg more milk than heifers in the untreated control. Periparturient antibiotic treatment of heifers with penethamate hydriodide prevented IMI during the first week after parturition and achieved a significant increase in milk yield, which was found to be economically beneficial.