Character states of New Zealand herds were formed within the environmental ranges of herd average total lactation yield of fat plus protein (MS), which is a proxy for feeding level, summer heat load index (HLI), herd size, and altitude. A univariate multibreed sire model was applied to first-lactation (2 yr old) records of milk, fat, and protein within each environmental character state to estimate breed and heterosis effects. A scaling effect was observed for MS yield between overseas Holstein-Friesian (OHF) and New Zealand Jersey (NZJ) animals when comparing breed performance in extreme MS character states. For example, differences for milk, fat, and protein yield between these breeds were 561, 1.3, and 9.3 kg, respectively, in the character state averaging 227 kg of MS/cow, much smaller than the differences of 1,151, 3.1, and 23.0 in the character state averaging 376 kg of MS/cow. Heterosis levels for milk, fat, and protein yields were highest for OHF x NZJ, followed by New Zealand Friesian (NZF) x NZJ and OHF x NZF with average heterosis for all traits of 7.3, 5.7, and 2.7%, respectively. Heterosis levels for OHF x NZF were suppressed in very low MS yield environments and in many cases were not significantly different from zero. Heterosis was suppressed in crosses with OHF in the high HLI environment. Crossbred animals (OHF x NZJ, NZF x NZJ, and OHF x NZF) generally achieved higher fat yields than any of the straight-bred animals.