Any sustainable alternative system of animal accommodation should optimize animal performance and welfare, and while having an acceptable level of construction costs, it should not compromise the surrounding environment. The objective of this experiment was to evaluate the performance and well being of animals accommodated outdoors over the winter period on out-wintering pads (OWPs), relative to animals housed indoors in conventional slatted floor sheds. The cows were provided with 3 different space allowances (6, 12 and 18 m2 per head) and were also either given a wind shelter or exposed to wind. The control group was housed indoors in a slatted-floor shed at a space allowance of 3 m2 per head. Animal production and indices (climatic energy demand (CED), behaviour cleanliness, hoof condition and immune function) of animal welfare were evaluated. There was no significant effect of stocking density outdoors or sheltering on live weight gain, carcass gain, fat score, fat score per 100 kg carcass, carcass conformation score, killing-out proportion, food intake or food efficiency. Relative to animals housed indoors on slats, animal accommodated outdoors on OWPs had higher live-weight gain, carcass gain, and food intake. However, animals on the OWPs had less lower fat scores per 100 kg carcass. Animals housed on slats were cleaner than animals housed at 6 or 12 m2 per head but not 18 m2 per head. There was no effect of treatment on physiological measures. Animals confined on the OWP with or without shelter, had a greater number of lying bouts per 24 h, had a greater synchronized lying frequency and displayed less hesitation prior to lying when compared with animals housed on slats. Indoor animals had more white line disease and under-run on their front hoof, when compared with outdoor animals. There was no evidence to suggest that out-wintering compromised animal welfare.