The U.S. dairy sector has undergone substantial structural change characterized by a shift to larger and fewer dairy operations, concentrated in relatively few States. This report measures and analyzes the dairy sector’s productivity growth and efficiency and identifies proximate drivers and sources of this growth in the face of the structural change observed from 2000 to 2020. Results indicate that productivity growth in the dairy sector was widespread, albeit with considerable variations by herd-size class, region, and production type. Western and Southwestern States—Idaho, New Mexico, Arizona, and California—experienced the fastest productivity growth with annual rates between 3.52 and 4.40 percent. Meanwhile, Southern States—Kentucky, Georgia, Missouri, and Tennessee—were the slowest growing with annual rates ranging between 0.89 and 1.74 percent. Furthermore, productivity across the largest herd-size class with more than 1,000 milk cows grew at an annual rate of 2.99 percent while the smallest herd-size class with fewer than 100 milk cows grew at an annual rate of 0.63 percent. Finally, organic dairy operations grew at a much slower pace of 0.66 percent compared with their conventional counterparts that grew at an annual rate of 2.51 percent.