This study was conducted to determine the effect of Bacillus subtilis ANSB060 biodegradation product (BDP) in reducing the milk aflatoxin M1 (AFM1) content of dairy cows fed a diet contaminated with aflatoxin B1 (AFB1). Twenty-four Chinese Holstein cows (254 ± 19 d in milk; milk production 19.0 ± 1.2 kg d−1) were assigned to three dietary treatments, as follows: (1) control diet (CON), consisting of a basal total mixed ration (TMR); (2) aflatoxin diet (AF), containing CON plus 63 μg of AFB1 kg−1 of diet dry matter; and (3) aflatoxin diet plus BDP (AF + BDP), containing AF plus BDP at 0.2% of diet dry matter. The experiment lasted 12 days, including an AFB1-dosing period from days one to eight, followed by a clearance period from days nine to twelve. Milk samples were collected on days 2, 4, 6, and 8–12, and the plasma was sampled on day 9, before morning feeding. Short-term AFB1 exposure did not affect the milk production and composition. The plasma biochemical indices, except for lactic dehydrogenase (LDH), were also not changed by the AFB1 intake. The plasma LDH level was significantly elevated (p < 0.05) following dietary treatment with AFB1, while no significant difference was observed between the AF + BDP and CON treatments. Adding BDP to the AFB1-contaminaed diet resulted in a significant reduction in AFM1 concentration (483 vs. 665 ng L−1) in the milk, AFM1 excretion (9.14 vs. 12.71 μg d−1), and transfer rate of dietary AFB1 to milk AFM1 (0.76 vs. 1.06%). In conclusion, the addition of BDP could be an alternative method for reducing the dietary AFB1 bioavailability in dairy cows.