Do you have manual calculation turned ON? What happens if you turn it off
and go back to automatic calculation?
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Hope this helps!
Anne Troy (better known as Dreamboat)
Author: Dreamboat on Word
Email: Com.Piersontech@Dreamboat
(Reverse it!)
Web: www.TheOfficeExperts.com
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I've never seen excel adjust rowheight when a formula evaluates to something
else.  I think that this is just the way excel works.  For the most part,
formulas return values to cells--they don't change other stuff--like other cells
or even rowheights.

(It's interesting that reopening the workbook will reset the rowheight.)

But maybe you could use a worksheet event to autofit the rowheight:

Right click on the worksheet tab that should have this behavior.  Select view
code and paste this in:

Option Explicit
Private Sub Worksheet_Calculate()
   Me.Rows.AutoFit
End Sub

When xl recalcs that sheet, the rowheight will be adjusted.