Infection by gastrointestinal nematodes (GIN) in grazing sheep can negatively influence the growth of lambs and milk yield. In the current study we evaluated the effect of high and low levels of infection with Teladorsagia circumcincta on production parameters of lactating ewes. Two groups of ewes were infected with 50,000 T. circumcincta third stage larvae (L3) 30 days before lambing. To obtain a high level of infection, Group HI was challenged with 30,000 L3 30 days post-partum (pp) and again 90 days pp with the same dose. The low infection group (LI) was treated with an intraruminal controlled-release albendazole bolus one-month pp. We determined the effect of the differing parasite loads on milk yield, milk composition, weight gain, and body condition (BC). Throughout the trial the milk yield was higher in the LI group and, consequently, at the end of the lactation, this group produced 11.1% more milk than the HI group. In the final third of lactation there was an overall increase in milk fat, protein, and lactose although the factor most affected by infection level was the protein percentage, with an increment of 11.9% in the HI group. The somatic cell counts remained low during the experiment indicating the absence of udder infection. Regarding weight and BC, significant differences were found only in BC although LI ewes weighed 2% more than the HI group. In conclusion, a low level of GIN infection in sheep leads to a better BC and a higher milk production with high protein percentage.