Two experiments were carried out to investigate i) the effects of four levels of lactic acid bacteria inoculants (LAB; 0, $2{ imes}10^5$, $3{ imes}10^5$ and $4{ imes}10^5$ cfu/g fresh forage) and two physical forms of rice straw (whole and chopped rice straw) on silage fermentation quality and nutritive value of rice straw (RS) silage for lactating Holsteins and ii) the effects of the replacement of corn silage (CS) with different inclusion levels (0, 25 and 50%) of LAB treated RS on lactating performance of Holstein dairy cows. Rice straw packed with stretch film was ensiled for 45 d. The results showed that the higher level of LAB inoculants in the silage quadratically decreased pH, $NH_3$-N and acetic acid concentrations and increased the contents of lactic acid and total organic acids. The CP content and DM losses in the silage declined linearly as the level of LAB addition was increased. Compared with whole-plant rice straw silage (WRS), chopped rice straw silage (CRS) dramatically reduced pH by 0.83. The concentrations of $NH_3$-N were similar in WRS and CRS and both were less than 50 g/kg of total N. Chopping rice straw before ensiling significantly enhanced the lactic acid concentration and total organic acids content whereas the concentration of acetic acid declined. The CP, NDF and ADF content of CRS was 13.4, 5.9 and 10.2% lower than in WRS, respectively. Except for butyric acid concentration, significant interaction effects of inoculation level and physical form of RS were found on all fermentation end-products. Our findings indicated that milk yield and composition were not affected by different level of RS inclusion. However, because of the lower cost of WRS, cows consuming a ration in which WRS was partially substituted for CS had 3.48 Yuan (75% CS+25% WRS) and 4.56 Yuan (50% CS+50% WRS) more economic benefit over those fed a CS-based ration. It was concluded that the chopping process and LAB addition could improve the silage quality, and that substitution of corn silage with RS silage lowered the cost of the dairy cow ration without impairing lactation performance.