To improve management on dairy herds, sensor systems have been developed that can measure physiological, behavioral, and production indicators on individual cows. It is not known whether using sensor systems also improves measures of health and production in dairy herds. The objective of this study was to investigate the effect of using sensor systems on measures of health and production in dairy herds. Data of 414 Dutch dairy farms with (n=152) and without (n=262) sensor systems were available. For these herds, information on milk production per cow, days to first service, first calving age, and somatic cell count (SCC) was provided for the years 2003 to 2013. Moreover, year of investment in sensor systems was available. For every farm year, we determined whether that year was before or after the year of investment in sensor systems on farms with an automatic milking system (AMS) or a conventional milking system (CMS), or whether it was a year on a farm that never invested in sensor systems. Separate statistical analyses were performed to determine the effect of sensor systems for mastitis detection (color, SCC, electrical conductivity, and lactate dehydrogenase sensors), estrus detection for dairy cows, estrus detection for young stock, and other sensor systems (weighing platform, rumination time sensor, fat and protein sensor, temperature sensor, milk temperature sensor, urea sensor, β-hydroxybutyrate sensor, and other sensor systems). The AMS farms had a higher average SCC (by 12,000cells/mL) after sensor investment, and CMS farms with a mastitis detection system had a lower average SCC (by 10,000cells/mL) in the years after sensor investment. Having sensor systems was associated with a higher average production per cow on AMS farms, and with a lower average production per cow on CMS farms in the years after investment. The most likely reason for this lower milk production after investment was that on 96% of CMS farms, the sensor system investment occurred together with another major change at the farm, such as a new barn or a new milking system. Most likely, these other changes had led to a decrease in milk production that could not be compensated for by the use of sensor systems. Having estrus detection sensor systems did not improve reproduction performance. Labor reduction was an important reason for investing in sensor systems. Therefore, economic benefits from investments in sensor systems can be expected more from the reduction in labor costs than from improvements in measures of health and production in dairy herds.