A study was conducted to determine if subacute ruminal acidosis (SARA) induced by feeding alfalfa pellets results in increases in free bacterial lipopolysaccharide (LPS) in rumen fluid and peripheral blood, and acute phase proteins in plasma, and to determine the effect of alfalfa pellet-induced SARA on feed intake, rumen fermentation characteristics, milk production and composition, and blood metabolites. Eight lactating Holstein cows, 4 of which were ruminally cannulated, were used in a 6-wk experiment and were fed once daily at 0900 h. During wk 1, cows received a diet containing 50% of DM as concentrate and 50% of DM chopped alfalfa hay. Between wk 2 and wk 6, alfalfa hay was gradually replaced with alfalfa pellets at the rate of 8% per week to reduce rumen pH. Rumen pH was monitored continuously in the ruminally cannulated cows using indwelling pH probes. Rumen fluid and peripheral blood were sampled 15 min before feed delivery and at 6 h after feed delivery. Based on adopted threshold of SARA of at least 180 min/d below pH 5.6, SARA was induced from wk 3 onwards. Replacing 40% of alfalfa hay with alfalfa pellets quadratically increased the DMI from 18.1 kg/d in wk 1 to 23.4 kg/d in wk 6. This replacement linearly decreased milk yield (32.7 vs. 35.9 kg/d) and milk fat percentage and yield (2.32 vs. 3.22%, and 0.77 vs. 1.14 kg/d, respectively), but increased milk protein percentage and yield (3.80 vs. 3.04%, and 1.23 vs. 1.07 kg/d, respectively). This gradual replacement also linearly increased the daily averages of total volatile fatty acids (90 to 121.9 mM), acetate (53.9 to 66.8 mM), propionate (21.5 to 39.6 mM), and osmolality (277.7 to 293.8 mmol/kg) in the rumen and decreased the acetate to propionate ratio from 2.62 to 1.73. Replacing alfalfa hay with alfalfa pellets linearly increased blood lactate from 1.00 mM in wk 1 to a peak of 3.46 mM in wk 5. Induction of SARA in this study increased free rumen LPS concentration from 42,122 endotoxin unit (EU)/mL in wk 1 to 145,593 EU/mL in wk 6. However, this increase was not accompanied by an increase in LPS (<0.05 EU/mL) and in acute phase proteins serum amyloid-A, haptoglobin, and LPS-binding protein in peripheral circulation. Results suggest that SARA induced by alfalfa pellets increased LPS in the rumen without causing translocation of LPS and an immune response.