Rearing substrate is an important component of the pre-weaning environment of dairy calves. Traditional substrate types, such as sawdust, are becoming difficult and/or expensive for farmers to obtain in New Zealand. Therefore, there is a need to evaluate alternative rearing substrates for dairy calves that that are economically viable for farmers, readily available and provide an acceptable level of animal welfare. The preference of dairy calves for four different rearing substrates and the effects on behaviour and physiology were evaluated. At 1 wk of age, 24 calves were housed in groups of four, in pens which were evenly divided into four rearing substrates: sawdust, rubber, sand and stones. During the first 3 d calves were given free access to all four substrates. Calves were then restricted to each substrate type for 48 h. In order to rank preference, calves were subsequently exposed to two surfaces simultaneously for 48 h until calves experienced all six treatment combinations. Finally, calves were given free access to all four substrates simultaneously for 48 h. Lying behaviour and location in the pen was recorded for 24 h at the end of each experimental period using handycams and accelerometers. Preference was determined based on lying times on each substrate. The insulating properties of each substrate were assessed using iButtons®. During the initial free choice period, the proportion of time spent standing (p < .001) and lying (p < .001) was influenced by substrate. Calves spent a higher proportion of time on sawdust (88%) than all other substrates (rubber: 6%, sand: 4% and stones: 3%). When restricted to each substrate, calves spent more (p <.05) time running on sawdust, rubber and sand compared to calves on stones. There were no effects (p > .05) of rearing substrate on the frequency of jumps, buck/kicks, head to object and mount/frontal pushing. Calves spent more (p < .05) time lying on sawdust and rubber in comparison to sand and stones. There were no effects (p > .05) of rearing substrate on the number and duration of lying bouts. We detected no effect (p > .05) of rearing substrate on concentrations of cortisol, lactate, glucose, or white blood cell, neutrophil and lymphocyte count or the neutrophil:lymphocyte ratio. The insulating properties were greatest for sawdust and lowest for sand. During the pairwise choice period, calves had a strong preference for one substrate over another, spending on average, 89% of their time on the preferred surface. Calves preference ranking was for sawdust, rubber, sand then stones as determined by the proportion of time spent on each surface. At the end of the study, when given free access to all rearing substrates again, calves spent a higher proportion of time on sawdust (85%) than all other substrates (rubber: 5%, sand: 7% and stones: 3%). In conclusion, dairy calves showed a clear preference for sawdust over rubber, sand and stones. This preference remained consistent over the course of the study. The calves’ preference for sawdust may be associated with the physical and thermal properties in comparison to the alternative substrates. However, factors such as cost to the farmer, availability and practicality of alternative substrates need to be considered along with animal preferences before any recommendations can be made.