In developing countries, the conventional test and slaughter strategy for the control of bovine tuberculosis is prohibitively expensive, and alternative control methods such as vaccination are urgently required. In this study, the efficacy of Mycobacterium bovis bacillus Calmette-Guérin (BCG) for protection against bovine tuberculosis (bTB) was evaluated in Holstein calves under field conditions in Ethiopia. Thirteen neonatally vaccinated and 14 control calves were exposed for 10 to 23 months to skin test reactor cows. Gamma interferon (IFN-γ) testing, comparative intradermal tuberculin testing, postmortem examination, and bacteriological culture were used for the evaluation of BCG efficacy. The overall mean pathology score was significantly (P < 0.05) higher in control calves than in vaccinated calves. Culture positivity for Mycobacterium bovis was higher in the control calves than in the vaccinated calves, and significantly more BCG-vaccinated animals would have passed a standard meat inspection (P = 0.021). Overall, the protective efficacy of BCG was between 56% and 68%, depending on the parameters selected. Moreover, by measuring gamma interferon responses to the antigens ESAT-6 and CFP-10, which are present in M. bovis but absent from BCG, throughout the experiment, we were able to distinguish between vaccinated animals that were protected against bTB and those animals that were not protected. In conclusion, the present trial demonstrated an encouraging protective effect of BCG against bTB in a natural transmission setting in Ethiopia.