Genetic selection for increased milk production in dairy cattle was not associated with an attenuated inflammatory response. The systemic and local inflammatory responses contribute to altered metabolism, reduced production performance, and increased cull rate of lactating dairy cows with clinical mastitis. More aggressive inflammatory responses were observed during the peripartum period when compared with cows in late lactation after an intramammary challenge with purified lipopolysaccharide. The epidemiology of clinical mastitis indicates that the greatest incidence is observed during the peripartum period; therefore, an enhanced inflammatory response with concomitant suppression in other immune responses may be involved in the etiology and severity of the clinical mastitis observed in peripartum cows. Milk production losses and compositional changes are observed among all mammary quarters from a cow with clinical mastitis, but the responses are more severe and sustained among infected quarters. The infected mammary quarters reflect both the systemic and local reactions, whereas uninfected quarters represent only the systemic response. The systemic effects of the inflammatory response include reduced DMI, hyperthermia, and changes in whole-body nutrient partitioning affecting mammary epithelial substrate availability, whereas local inflammatory effects include energetic requirements of the increased inflammatory leukocyte pool, decreased synthetic capacity of mammary epithelium independent of substrate availability, and paracellular leakage of milk components from the alveolar lumen into the extracellular fluid. Research has focused on improving host immunological defenses, attenuating the inflammatory response, or improving the resolution of the disease state to limit the deleterious effects during clinical mastitis. This paper highlights the role inflammation plays in the etiology and pathophysiology of clinical mastitis as well as potential management strategies to reduce or prevent those losses.