Cows experiencing heat stress in utero produce less milk in their first lactation relative to their normothermic herdmates. However, it is unclear if heat stress in utero affects development of the mammary gland (MG), which may affect future milk yield. We hypothesized that exposure of the fetus to heat stress in utero alters mammary microstructure and cell processes that determine mammary cell number later in life. Heifers (in-utero CL [IUCL], n = 10; in-utero HT [IUHT], n = 9), were born to dams housed in shaded barns either with fans and soakers or without cooling devices during late gestation (dry period, ~46 d), respectively. During their first lactation, heifer milk yield was recorded from calving to 84 d in milk (DIM). MG were biopsied at 21 and 42 DIM. Sectioned tissues were stained with Masson’s trichrome to visualize morphology. Apoptosis and proliferation of mammary cells were determined through immunohistochemistry (TUNEL and Ki67, respectively). Alveoli luminal area was measured, alveoli were counted, MG connective tissue was quantified, and TUNEL and Ki67 positive and negative mammary epithelial and stromal cells were counted in Image J. Data were analyzed by repeated measures ANOVA or generalized linear mixed models using SAS. IUCL had lower colostrum yield (3.7 vs. 5.5 ± 0.4 kg/d, P = 0.01) but higher milk yield (31.5 vs. 30.2 ± 0.4 kg/d; P = 0.05) relative to IUHT. Alveoli number was similar between groups, but MG of IUCL tended to have larger alveoli than IUHT (4,390 vs. 3,577 ± 348 μm², P = 0.11). The MG of IUCL tended to have less connective tissue in the stromal compartment relative to IUHT (86,727 vs. 15,8329 ± 27,616 μm², P = 0.08). IUCL tended to have a greater percent of proliferating cells in MG, driven by a significant difference in percent stromal cells proliferating (2.0 vs. 1.0 ± 0.4%, P = 0.05). There was no difference between groups in percent mammary epithelial cells or stromal cells undergoing apoptosis (P > 0.05). These results suggest that fetal exposure to heat stress in utero adversely affects mammary development in the first lactation, with consequences for milk yield.