The aim of this study was to assess the effect of protein source, either soybean meal (SM) or canola meal (CM), and microencapsulated sodium butyrate (MSB) supplementation in a pelleted starter mixture on the development of the gastrointestinal tract (GIT) in dairy calves. Twenty-eight bull calves (8.7 ± 0.8 d of age and 43.0 ± 4.4 kg; mean ± SD) were assigned to 1 of 4 treatments in a 2 × 2 factorial arrangement: CM as a main source of protein without or with MSB or SM without or with MSB. Calves were fed starters ad libitum and exposed to a gradual weaning program, with weaning taking place on 51.7 ± 0.8 d of age. Calves were observed for an additional 3 wk after weaning and slaughtered on d 72.1 ± 0.9 of age, after which the GIT was dissected. Morphometric measurements were recorded, and samples for determination of ruminal fermentation, histology, gene expression, and brush border enzyme activities were collected. Canola meal use in the starter mixture increased abomasal tissue weight, jejunal tissue weight and length, and mRNA expression of SLC16A4 (formerly known as MCT4) and FFAR2 (GPR43) in the ruminal epithelium, and decreased ruminal ammonia and mRNA expression of SLC15A2 (PEPT2) and SLC6A14 (ATB0+) in the proximal small intestine and ileum, respectively. However, MSB inclusion in the starter mixture decreased ruminal papillae length, ruminal epithelial surface, and ruminal epithelium dry weight, while increasing mRNA expression of SLC16A1 (MCT1) in ruminal epithelia. Reduced ruminal surface area associated with MSB supplementation was the most apparent when MSB was combined with CM in the starter mixture. Additionally, MSB supplementation decreased the thickness of omasal epithelium, omasal epithelium living strata, and stratum corneum, and increased duodenal and ileal aminopeptidase A enzymatic activity and ileal aminopeptidase N enzymatic activity. Overall, CM might increase growth of the GIT of calves, particularly of the small intestine, but may negatively affect intestinal epithelium function and peptide and AA absorption. Supplementation of MSB has a negative effect on the ruminal and omasal epithelium development, particularly when combined in a starter mixture with CM.