This study aimed to characterize the highly pathogenic avian influenza (HPAI) hemagglutinin type 5 and neuraminidase type 1 (H5N1) clade 2.3.4.4b outbreak in dairy cattle and to estimate the effect of the outbreak on health, productivity, and economics at the herd and individual levels for 130 d from the outbreak. Herd records from a Michigan dairy farm, confirmed as affected based on PCR testing in milk, were used for this cohort study. Records included daily bulk tank information, herd management and feed intake data, and temperature alerts generated from cows´ intraruminal automated sensor devices during the year of the outbreak and the previous year. Health indicators included fever (used to determine the cumulative incidence of HPAI H5N1–affected cows and outbreak length), culling, death, SCC, and DMI. Productivity was estimated based on milk yield and composition. The outbreak and postoutbreak periods were compared with the same periods of the previous year using joinpoint segmented regression analysis. Analyses included 486 daily bulk tank observations and 13,542 fever alerts from 437 Holstein dairy cows. Based on these outcomes, we estimated the economic effect of HPAI H5N1 at the herd and individual level using a stochastic simulation model. Cumulative incidence was 32% of the herd during the outbreak lasting 45 d. The outbreak led to an average milk yield reduction of 5.7%, with a peak in reduction of 22% lower than the preoutbreak average. The total milk drop was 324 kg of milk per cow in the herd, or 1,014 kg per affected cow. A lengthy recovery of milk yield began 19 d after the onset of the outbreak, reaching the previous year´s yield 132 d (4.4 mo) later. The bulk tank SCC (BTSCC) peaked at 296,703 cells/mL, marking a 3-fold increase from preoutbreak levels. This tipping point occurred 22 d after the outbreak onset. The BTSCC gradually returned to preoutbreak levels 46 d after the outbreak began, coinciding with the outbreak´s conclusion. During the outbreak, the average DMI consumed by lactating cows was reduced by 1.5 kg/d per cow (3.5%), whereas affected cows reduced DMI on average 4.7 kg/d over the outbreak. The cost of HPAI H5N1 for affected cows based on milk reduction, replacement, treatment costs, and reduced DMI was estimated at $504 (90% range = $422–$597). At the herd level, for a 500-cow herd, the economic effect was estimated at $79,145 (90% range = $56,726–$84,994). The economic effect of the outbreak per cow in the herd averaged $158 (90% range = $132–$184; i.e., averaged over the entire herd). Milk reduction represented 92.3% of the total economic losses, followed by death-related costs (4.7%), treatment and labor costs (1.6%), and culling costs (1.5%). Reduced DMI saved an estimated $11,705 in feed expenses for a 500-cow herd. The effect of HPAI H5N1 on health, productivity, and economics was both severe and immediate, challenging the economic sustainability of the dairy farms. These findings emphasize the urgent need for strong biosecurity measures to prevent and control such outbreaks effectively to limit the high burden estimated.