Our objectives were to evaluate effects of pen-stocking density (freestall housing) and straw processing on heifer growth performance and feedbunk sorting behaviors by Holstein dairy heifers. A 2 × 3 factorial arrangement of straw-processing (GOOD or POOR) and pen-stocking-density [100 (CONTROL), 125, or 150% of capacity] treatments was evaluated with 240 Holstein dairy heifers (410 ± 56.3 kg) that were blocked by weight, and assigned to 24 pens with 4 pens/interactive treatment. For 91 d, heifers were offered TMR diets containing wheat straw either processed through a 7.5-cm screen (GOOD; 46.0% NDF, 12.9% CP, 60.7% TDN) or not processed (POOR; 46.5% NDF, 12.6% CP, 60.0% TDN) before mixing. Diets were dispersed at 1000 h daily, and bunks were serial sampled throughout the day. Diets were offered for ad-libitum intake, but with minimal orts (<3%); as such, sorting factors were calculated as bunk value/initial value. For POOR straw, sorting factors for large particles increased linearly from 1.26 to 2.82 across sampling times (P < 0.001), differing (P ≤ 0.004) from GOOD straw diets at 2200, 0100, 0600, and 0900 h (orts). Sorting factors for diets blended with GOOD straw also increased linearly (P < 0.001) across sampling times, but sorting was less severe (1.27 to 1.97). Overall, physically effective fiber (pef) exhibited responses similar to those for large particles, except that sorting factors for pef particles were limited to narrower ranges for both GOOD (1.04 to 1.14) and POOR (1.03 to 1.26) diets. Despite these differences in sorting behaviors, daily DMI was not affected by treatment (mean = 9.64 kg DM/d; P ≥ 0.383), nor was daily intake of TDN (5.92 kg TDN/d; P ≥ 0.164). For GOOD straw processing, heifers housed within overstocked pens exhibited reduced ADG compared with CONTROL (0.92 vs. 0.99 kg/d; P = 0.009). With POOR straw processing, ADG differed between the 125 and 150% stocking rates (0.96 vs. 0.88 kg/d; P = 0.005), as did the within-pen CV for ADG (10.7 vs. 18.6%; P = 0.025). These within-pen CV effects were not observed (P = 0.317) with GOOD straw processing, suggesting that within-pen variability in ADG may be exacerbated by overstocking when straw is processed poorly.