Many agro-industrial by-products, such as peanut skin, can be used as alternative fiber sources to reduce feeding costs while maintaining or improving dairy cow productivity and milk quality. The present study aimed to investigate the effects of peanut skin on milk production and composition in lactating Holstein cows. The study was conducted on nine lactating Holstein cows, divided into three treatment groups: a control group fed a conventional diet without peanut skin, treatment 2 with 12.5% peanut skin, and treatment 3 with 25% peanut skin replacing alfalfa. Cows were housed individually and fed three times daily, with milk yield and feed intake recorded. The study followed a completely randomized design with repeated measures. Results showed that cows consuming control diet had the highest dry matter (DM) digestibility (839.7 g/kg), followed by treatment 3 (835.4 g/kg) and treatment 2 (822.4 g/kg). In addition, neutral detergent fiber (NDF) digestibility was significantly increased in peanut skin treatments (P < 0.01). Feed intake was highest in control group, with residual feed highest in treatment 3, and dry matter intake (DMI) was slightly reduced in peanut skin treatments, possibly due to fiber content or palatability issues. Milk yield was highest in control group (27.89 kg/day), followed by treatment 2 (24.78 kg/day) and treatment 3 (24.11 kg/day), with peanut skin inclusion reducing yield, potentially due to energy dilution or tannin interference. However, milk fat yield, solid non-fat, and lactose yield remained unaffected by experimental treatment (P > 0.05). In terms of milk composition percentages, treatment 2 had the highest fat (4.74%), protein (3.02%), and lactose (5.09%) levels, while SNF and density remained stable. In conclusion, moderate peanut skin inclusion (12.5%) improved milk fat and protein percentages without significant decrease in milk production, while higher inclusion (25%) enhanced nutrient digestibility but reduced milk production, suggesting peanut skin is a viable alternative fiber source if inclusion levels are optimized. Future research should focus on long-term effects and tannin mitigation strategies.