Objective: To examine the association between intake of dairy products and indicators of diet quality among a sample of Australian children. Methods: Three 24-hour recalls were collected from 222 children aged 8–10 years living in western Sydney. Analysis of covariance was used to examine differences in mean intakes of foods and nutrients among 3 dairy consumption groups (<1 serve, 1–2 serves, ≥2 serves per day). The percentage of children meeting healthy eating guidelines for foods and estimated average requirements (EAR) for nutrients was also assessed. Results: Higher dairy consumption was associated with higher intakes of energy, protein, calcium, phosphorus, magnesium, potassium, zinc, vitamin A, riboflavin, and niacin as well as foods from the bread and cereal group but lower intakes of mono- and polyunsaturated fats, foods from the meat and alternatives group, and energy-dense, nutrient-poor foods. Children who consumed ≥2 serves of dairy products per day (38%) were more likely to meet food and nutrient recommendations. Body mass index z-score and waist circumference were not associated with dairy consumption. Milk intake was inversely associated with the intake of sugar-sweetened beverages, and children who did not meet their minimum dairy serve recommendations consumed higher quantities of sugar-sweetened beverages than milk. Conclusions: Adequate dairy consumption was associated with diets of higher nutritional quality but also higher intakes of energy, suggesting a potential benefit from shifting consumption from regular-fat to reduced-fat dairy products in line with current national recommendations.