Camels (Camelus dromedarius) are the primary livelihood assets in pastoral systems providing both tangible and intangible benefits through provision of milk, meat, finance, insurance, risk aversion and social capital. Production of camels in the ASALs (Arid and Semi Arid Lands) that has traditionally been pastoral is rapidly emerging in peri-urban areas with sedentarization process of pastoral communities in urban areas in search for employment opportunities. Camel calf mortality at preweaning stage is a major productivity constraint in the pastoral system with female calf mortality up to weaning reported as high as 20 to 30%. The purpose of the study was to compare the economic losses associated with rearing camel heifer replacements from birth to first calving when they enter the milking herd between pastoral and peri-urban production systems of Isiolo district. The study used primary data collected through interviews with 729 and 1271 cases of loss in pastoral and peri-urban systems respectively obtained using multistage sampling techniques. Three analytical methods were used in this study; Tobit model, Multiple regression model and Deterministic dynamic modelling. Results indicate that of the heifer calves born, in peri-urban systems 0.505 do not reach first calving, 11.8% higher than the loss in pastoral systems (0.387). A large proportion (>50%) of the loss is attributed to diseases at preweaning age. The loss of potential heifers would be significantly reduced with improved access to veterinary services, security situation and provision of own herd labour. The direct economic loss of a heifer before first calving on average was 11.79% significantly lower in peri-urban system than the estimated loss in pastoral system. The economic loss was significantly influenced with access to extension services, herd size and security situations. Sensitivity analysis indicated the most promising interventions for reducing losses of heifers is reduced preweaning losses and reduced deaths from disease incidences in the peri-urban system. Therefore, policy intervention to support peri-urban camel milk systems need target improving infrastructure to enhance delivery of veterinary and extension services, provision of own herd labour and security situations in the ASALs.