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The aim of the current study was to assess if cows preferred pasture or indoor housing, and how diurnal and environmental factors affected this preference. Lactating dairy cows (n = 5 groups, each containing 5 cows) were sequentially housed either in a free-stall barn on pasture, or given the choice between the 2 environments. Each group was tested 3 times under each condition, for a total of 21 d, to assess the effects of varying climatic conditions (outdoor temperature ranged from 9.9 to 28.2°C and daily rainfall from 0 to 65 mm/d over the course of the experiment). When provided the choice, cows spent on average (± SD) 13.0 ± 0.6 h/d on pasture, mainly at night. The time cows spent on pasture during the day decreased with the temperature-humidity index (R2 = 0.55); time on pasture at night decreased with rainfall (R2 = 0.12). When provided a choice, cows spent more of their lying time on pasture (69.4 ± 0.02% of the total lying time/d) than indoors in the free-stalls. Cows also spent more time in total lying down when provided a choice than when confined to pasture [0.6 h/d more lying time; standard error of the difference (SED) = 0.21 h/d] and spent even more time lying down when confined indoors (1.1 h/d more time; SED = 0.21 h/d). Cows used the indoor housing especially for feeding; feeder use peaked when cows returned from morning and afternoon milkings. However, cows with free access to pasture spent 1.0 h/d (SED = 0.09 h/d) less time eating the TMR available indoors, resulting in a decline in intake of 2.9 kg of dry matter/d (SED = 0.36 kg of dry matter/d). How cows used the indoor housing differed when cows were provided a choice; for example, cows spent a greater percentage of their time indoors at the feed alley both during the day (47% of the total time spent indoors, versus 41% for cows confined indoors, SED = 0.02%) and at night (22 vs. 5%, SED = 0.04%). In conclusion, under the housing and environmental conditions tested, cows showed a strong preference for access to pasture at night and for access to indoor housing during the day when temperature and humidity increased.