The objectives of the study were to define the sensitivity and specificity of the California Mastitis Test (CMT) in determining the presence of intramammary infection in postpartum dairy goats and to determine whether antibiotic therapy increased bacteriological cure rate and lowered somatic cell count (SCC) compared with untreated controls. A CMT was performed and milk samples were collected for bacteriology from 211 glands of 106 does between 0 and 10 d after kidding. From a population of 3,239 glands from goats in 4 commercial herds, goats with one or both glands with a CMT score of >1 and from which bacteria were isolated were either assigned to be treated with 3 intramammary infusions at 12-h intervals of 75 mg of sodium ampicillin and 250 mg of sodium cloxacillin (n=57 glands) or left as untreated controls (n=49 glands). Milk samples were collected again 14 ± 3 and 21 ± 3 d later for bacteriology and SCC determination. Composite milk yield, goat SCC, length of lactation, and survival data were collected. A partial budget was constructed to assess the cost effectiveness of treatment. At a cut point of greater than trace, the sensitivity, specificity, and positive and negative predictive values of the CMT were 0.74, 0.74, 0.42, and 0.92, respectively. Treatment increased the bacteriological cure rate compared with no treatment [30/57 (53%) vs. 6/49 (12%)], but there was a pathogen by treatment interaction whereby treatment increased cure proportion in glands infected with minor, but not major, pathogens. Treatment reduced the foremilk gland-level SCC [1,595 (95% CI=1,106-2,300) vs. 3,028 (95% CI=2,091-4,385) geometric mean (× 1,000) cells/mL] but not the SCC at goat level [1,596 (95% CI=1,219-2,090) vs. 1,488 (95% CI=1,132-1,955) geometric mean (× 1,000) cells/mL] compared with no treatment. Milk yield, risk of removal from the herd, and length of lactation were not altered by treatment. Treatment resulted in a loss of NZ$20.39/doe. It was concluded that use of the CMT as a screening test resulted in a higher likelihood of finding a gland that would be infected than selecting a gland at random. Treatment increased bacteriological cure rate and reduced SCC at gland level compared with no treatment. However, at goat level, milk yield, SCC, and survival were not altered, resulting in no economic benefit of treatment.