The effects of lucerne (Medicago sativa) post-grazing residual pasture height on pasture utilisation (vertical and horizontal), pasture intake and animal production were investigated in a sub-tropical partial mixed ration dairy system. The study took place at the Gatton Research Dairy, Southeast Queensland (−27.552, 152.333), with a 26-day adaptation period followed by two 8-day measurement periods during August and September 2018. A quantity of 30 multiparous Holstein-Friesian dairy cows were offered two levels of mixed ration, 7 and 14 kg dry matter (DM)/cow/day for low and high levels respectively, and five levels of pasture allocation, to achieve decreasing residual pasture heights. Pasture allocations measured from 5 cm above ground level for the low mixed ration groups averaged 12.7, 15.9, 19.8, 35.3 and 49.2 kg DM/cow/day, and for the high mixed ration groups averaged 5.0, 8.3, 10.3, 18.6, and 25.2 kg DM/cow/day, respectively. As pasture allocation decreased, cows were forced to graze further down into the pasture sward, and therefore residual pasture height declined. Total intake (kg DM/cow/day) declined as residual pasture height (expressed as % of the initial height) declined, irrespective of mixed ration level, decreasing by 0.5 kg DM/cow/day for every 10% decrease in residual pasture height. Low total intakes were associated with high non-esterified fatty acid (NEFA) levels in plasma, indicating mobilisation of fat tissue to maintain milk production. In the high allocation treatments, an area of pasture remained ungrazed and cows were only grazing the top leafy stratum where pasture intake rate and intake were highest. Therefore, to maximise intake in sub-tropical partial mixed ration (PMR) systems, lucerne pasture should be allocated so that cows are always grazing the top leafy stratum. This can be achieved by ensuring the pasture around faecal patches remains ungrazed.