OBJECTIVE: Dietary guidance emphasizes plain low-fat and skim milk over whole, reduced-fat, and flavored milk (milk eligible for replacement [MER]). The objective of this study was to evaluate the population-level impact of such a change on energy, macronutrient and nutrient intakes, and diet cost. DESIGN: Cross-sectional modeling study. SETTING: Data from the 2001-2002 and 2003-2004 National Health and Nutrition Examination Survey. PARTICIPANTS: A total of 8,112 children aged 2-19 years. MAIN OUTCOME MEASURES: Energy, macronutrient, and micronutrient intake before and after replacement of MER with low-fat or skim milk. ANALYSIS: Survey-weighted linear regression models. RESULTS: Milk eligible for replacement accounted for 46% of dairy servings. Among MER consumers, replacement with skim or low-fat milk would lead to a projected reduction in energy of 113 (95% confidence interval [CI], 107-119) and 77 (95% CI, 73-82) kcal/d and percent energy from saturated fat by an absolute value of 2.5% of total energy (95% CI, 2.4-2.6) and 1.4% (95% CI, 1.3-1.5), respectively. Replacement of MER does not change diet costs or calcium and potassium intake. CONCLUSIONS: Substitution of MER has the potential to reduce energy and total and saturated fat intake with no impact on diet costs or micronutrient density. The feasibility of such replacement has not been examined and there may be negative consequences if replacement is done with non-nutrient-rich beverages.